CREDIT NOTE IN GST, Goods and Services Tax - GST

[NAMAN DOKANIA]

Is GST Leivable on Financial Credit Note recevied from supplier due to the fact, that it relates to the following:-

1. Early Payment.

2. Turnover Discount

3. Selling the purchased goods at a discount to retailer.

4. Other Incentive

Posts / Replies

[KASTURI SETHI]

Serial No1 and 2 fall under the category of post-sales discount. The assessee will have to conform to the conditions laid down under Section 15(3)(b) of CGST Act and serial no.3 & 4 fall under promotional schemes. These are incentives and taxable.

[Amit Agrawal]

Wherever any of these financial credit-notes are in nature of post-sale discount (which includes Early Payment & Turnover Discount), conditions laid down under Section 15(3)(b) of CGST Act will comes into play as rightly observed by Ld. Shri Kasturi Sethi Ji.

However, even if they in nature of post-sale discount confirming the conditions laid down under Section 15(3)(b)(i) of CGST Act, issuance of credit-note with GST u/s 34 (1) is optional at end of the supplier.

Moreover, gst cannot be levied upon buyer for any 'post-sale discounts' received from supplier, irrespective of whether the conditions laid down under Section 15(3)(b) are fulfilled or not.

In my humble view, without going through entire agreement and arrangement between OEM / supplier and distributor / buyer about these promotional scheme/s, it is not possible to answer this query with regards to Point no. 3 (i.e. Selling the purchased goods at a discount to retailer) & 4 (i.e. Other Incentive).

These points (No. 3 & 4) are constant areas of dispute between assessee and Department where 'mutuality of business interest' between supplier / OEM and buyer / distributor is bone of contention.

These are strictly personal views of mine and the same should not be construed as professional advice / suggestion. I respect contrary views.