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GST not applicable on incentive, schemes or cash discount offered by supplier, Rules AAR - M.P.
- This order is taxpayer favorable order in the matter of M/S RAJESH KUMAR GUPTA OF M/S MAHVEER PRASAD MOHANLAL, GANDHI GANJ, JABALPUR, 482002(MP) AUTHORITY FOR ADVANCE RULING-MADHYA PRADESH
- Because the cash received in the form of a credit note is a discount rather than a supply to the supplier, On cash discounts/incentives/schemes provided by the supplier to the applicant via credit note against supply without adjustment of GST, no GST is levied on the receiver.
- The value of the supply shall not include any discount which is given,-
Before or at the time of the supply if such discount has been duly recorded in the invoice issued in respect of such supply; and b. after the supply has been effected, if,-
- such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices; and
- input tax credit as is attributable to the discount on the basis of document issued by the supplier has been reversed by the recipient of the supply".
- In the case of a commercial credit note issued by the supplier for a cash discount and incentives/ schemes provided without adjustment of GST if the discount is not covered under section 15(3)(b) of the CGST Act, 2017 and the discounts are not in terms of prior agreement,
- the applicant can claim the ITC for the full GST charged on the invoice and no proportionate reversal of ITC is required.
- This is dependent on the GST paid for the goods/services not being reversed, repaid, or re-credited to the applicant in any way by the provider.
Conclusion
For deatils referen Have a look the link attached : Goods and services tax not leviable on incentive/schemes/ cash discount given via credit note without adjustment of GST which is offer by supplier
