TaxTMI 
TaxTMI 
In an agreement instead of receiving 20% referral invoice which attracts GST @ 18% to the supplier who is engaged in restaurent services being sale of food and beverages attracting GST@5%. Since the 18% GST paid on this referral fees will become the cost to supplier, is it possible that insetead of apying GST 5% on Rs. 100, the supplier will pay GST on 80, treating 20 as the Trade discount as per the rules and provision Section 15(3) and CBIC circular.
GST query related to Section 15 (3) of CGST Act, 2017
24 Aug 2026 
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GST valuation of restaurant supplies turns on whether referral fees can qualify as trade discounts reducing taxable value.
GST valuation and trade discount treatment are considered where a restaurant supplier pays referral fees attracting GST while supplying food and beverages at a lower rate. The issue is whether 20 may be treated as a trade discount under section 15(3) of the CGST Act, so that GST is determined on 80 rather than the full supply value, having regard to contractual terms and applicable CBIC guidance. (AI Summary)
GST valuation and trade discount treatment are considered where a restaurant supplier pays referral fees attracting GST while supplying food and beverages at a lower rate. The issue is whether 20 may be treated as a trade discount under section 15(3) of the CGST Act, so that GST is determined on 80 rather than the full supply value, having regard to contractual terms and applicable CBIC guidance. (AI Summary)