GST on gross or discounted and actual price of supply

[DEV KUMAR KOTHARI]

General whether, GST should be charged on gross price or actual price charged, after deducting discount allowed - discount may be for reasons like bulk sale,  festive  sale, birthday sale, anniversary sale or against points earned on earlier sale of good to same customer. 

Specific- a club allows certain discounts to senior citizen members of club on certain days of week  and  on certain occasions. For example suppose foods and beverage at dining hall of club- gross charge is Rs.1000 after discount of 30 pc actually  charged is  Rs,700/- whether GST should be on Rs,1000 or Rs.700

[Sadanand Bulbule]

Dear Sir

You are absolutely at the right page.

In your example, assuming the discount is given at the time of billing and clearly invoiced, GST should be on the actual  charged amount (Rs,700), not on the gross amount of Rs. 1000/-

Refer:  Section 15 & CBIC Circular No. 251/08/2025-GST dated 12/09/2025.

[DEV KUMAR KOTHARI]

Thanks Mr. Sadanand Bulbule. 

I also think that simple membership of club will not be a reason to  levy GST on pre discount amount because a member of club has no say in management except voter in General Meetings of the club. and proportion of voting right is very nominal say 1/ 2500,

Even if any member who is also in executive committee will be eligible for GST on post discount amount because in such case also discount is allowed as a member having senior citizenship and not because of  being a member of executive committee.

In case any discount is allowed to member of executive committee, in that capacity, then only perhaps fair market value can be applied on the basis of transactions at arms length,

Let us share and do brain storming for learning in team manner.

Regards

Dev Kumar Kothari

[Ganeshan Kalyani]

I subscribe to your view, Sir.

[Sadanand Bulbule]

Dear Sir

Given the Kerala High Court’s 2025 judgment in Indian Medical Association case restoring the doctrine of mutuality, a strong argument exists that GST should not apply on club-member transactions, and in any case valuation should be only on the post-discount amount when discounts are membership-based and not linked to management control.

2025 (4) TMI 872 - KERALA HIGH COURT

2024 (7) TMI 1448 - KERALA HIGH COURT

Careful documentation + legal opinion can further solidify this defensible position while keeping compliance risk low.

Warm regards

AI Summary

Club membership discounts: GST applies to the post discount billed price when discount is given at billing and invoiced.
Valuation for GST depends on discount timing and nature: discounts given and invoiced at billing permit valuation on the post discount charged amount, supported by Section 15 and CBIC Circular No. 251/08/2025 GST. Membership based discounts that do not arise from managerial control are treated as ordinary discounts and taxed on the post discount price; non arm's length or officer linked benefits may require valuation at fair market or arm's length value, and the doctrine of mutuality may inform defenses for member transactions.