Exclusion of Discount or incentive given before or at the time of supply [ Section 15(3) of CGST Act ]

Discount exclusion under GST: invoice-recorded or pre-agreed discounts can reduce taxable value when ITC reversal occurs.

Section 15(3) excludes from taxable value discounts given before or at supply if invoiced, and post-supply discounts where agreed at or before supply and the recipient reverses input tax credit attributable to the discount; secondary commercial credit notes that do not meet these conditions remain part of taxable value. Clarifications treat free samples, buy-one-get-one offers and staggered volume discounts in line with these rules, and confirm No Claim Bonus as an admissible deduction when shown on invoice; subsidies are non-taxable. Administrative mechanisms for verifying ITC reversal are required when discounts are given by credit note.