Taxability of Gifts to Dealers/Sub-Dealers Under GST

[Ramanathan Seshan]

Dear experts,

Company A provides gifts to its dealers and sub-dealers during festivals, upon achieving certain sales targets, or when new branch stores are opened/expanded.

Would such gifts be considered taxable under GST, especially considering that the definition of "consideration" includes any inducement for a supply? If they are indeed taxable, how should these be disclosed in GSTR-1?

AI Summary

Performance-linked gifts taxable under GST; treat as supply and disclose in returns with a tax invoice.
Performance linked gifts to dealers or sub dealers are taxable as a supply for consideration under GST, must be valued at fair market value, invoiced as taxable supplies, and disclosed in returns; input tax credit is available where treated as taxable incentives, while truly gratuitous gifts or specified exceptions may require ITC reversal and different treatment.