the Manufacturer gives an scheme document with terms and condition on email that upon completing certain purchases volume they would receive gold coin, cars, or trips as per Sec 15(3)(b)(ii) agreement must be present for reversing output and circular 92 says the same and 251 also that if agreement not present then no ITC to be reversed if present
First would this scheme document would be treated as agreement and if yes is ITC reversal on purchases to achieve this scheme required to be reversed proportionately
What are ingredients to treat this scheme document as an agreement
Whether emailed promotional scheme counts as an agreement under GST and triggers valuation/ITC reversal under Sections 15 and 17(5) A taxpayer asks whether an emailed promotional scheme promising gold, cars or trips on meeting purchase volumes constitutes an 'agreement' under GST such that supply of those items triggers valuation consequences and requires proportionate reversal of input tax credit. Key issues: whether the scheme document amounts to an enforceable agreement (clear terms, offer and acceptance, consideration, intent to create legal relations, and identifiable parties/obligations); if so, whether the value of incentives must be included in taxable output and corresponding ITC reversed proportionately; and what factual indicia (binding terms, performance conditions, delivery mechanism, records of acceptance) determine treatment. (AI Summary)
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