Free supply of machine for committed purchase of materials - Goods and Services Tax - GST

A customer purchased a machinery as per an agreement as given below Cost Rs.29,58,000 paid GST Rs.5,32,440/- and claimed input tax. The output of machinery is fully taxable. After signing agreement the Company gave four commercial credit notes for a total amount of Rs.29,58,000/- thus effectively making the machinery free of cost. No GST charged or reversed on credit notes issued by supplier. Now the company is buying minimum committed raw materials from the supplier of machinery by paying appropriate GST and is claiming input. The doubts are 1.Is it proper for the company to claim input on machinery? 2.Is the company liable to bill the supplier as any different supply on receipt of credit notes. 3. On what value should the machinery appear in books. Cost or Cost less discount? The relevant parts of contract signed are as below. No further information is available from suppliers side as far as GST and accounting treatments are concerned. Agreement 1. The customer M/s xxxxxx agrees to purchase ABCD Machine ('Equipment') at the Price of Rs. 29,58,000.00 (Rupees only) inclusive of applicable GST referred as committed business value in this contract. 2. The customer will pay for the Committed business value by purchasing materials of Rs 2,06,964/- excluding GST per month over a period of 60 months in equal monthly installments without any interest component. 3.The customer commits to purchase the above mentioned materials in next 60 months beginning from 01.05.2023 and ending on 31.05.2028 (The 'Term ). 4. The term of this MOU shall be of 60 months. Purchase values per month will be constant as per clause 2. 5. Upon successfully meeting the business commitment and payment obligations for the given quarter, Company will provide a discount of 25.00% (Excluding GST) of the deal value through a Commercial Credit Note. The discount shall be provided by issuance of a credit note on quarterly basis to customer.