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TMI Blog2018 (11) TMI 1264X X X X Extracts X X X X X X X X Extracts X X X X ..... us given by the principal is nothing but an additional discount given for early payment made by the customer. In this case there is only one supply made by the principal to the customer. The additional discount relates to supply already made by the principal and passing on such bonus to the customers by DCA is in the nature of pure agent. However, any amount retained by the DCA on account of early payment is in the nature of supply made to the principal as business support services on which the DCA is already paying GST. ITC Credit on GST charged - Held that:- The invoices can be issued by the supplier of the goods and services only - In the instant case, the customer is recipient of the goods supplied by the principal and any amount due to him can be adjusted by credit notes/ debit notes in relation to that supply. As the customer is recipient of the goods or services, he is not liable to issue invoices in respect of goods or services supplied by the principal. When there is no supply to DCA by customer, the DCA is not entitled to take ITC of GST passed on to the DCA in any manner. Ruling:- The additional bonus passed on by the applicant (DCA) to the customer, is not in natu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limit, DCA is allowed to place orders of the customers. At the end of the month, for the orders booked through DCA and goods supplied by the principal, DCA gets the commission from principal for which DCA raises invoices on the principal along with GST. 1.3 If payment is made directly by the DCA before due date (before 10 days credit period) on behalf of customer, the Principal gives Additional Commission to the DCA as per the agreement between Principal and DCA. 1.4 The role of the DCA is to promote the sale and book order and ensure payment to the principal in case of default from the customer. In the entire transaction, neither principal supplies the goods to DCA nor does DCA supply the goods to customers. Goods are directly supplied by Principal to the customers at the price declared by the principal from time to time by charging applicable GST on the invoice. On the due date, the customer pays to principal directly for the material supplied to them. In case of any delay in payment from the customer, principal charges interest along with GST from customer. 1.5 Further, as per the pricing policy of Principal, customers can avail dispatches either on cash or credit (10 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 28th June 2017, applicable w.e.f. 01.07.2017, as amended from time to time and corresponding Raj. GST Notification issued by Government of Rajasthan? 3. Personal Hearing (PH) 3.1 In the matter personal hearing was given to the applicant. Mr. Hemendra Choudhary, CA (Authorised representative) of applicant appeared for personal hearing on 08.10.2018. During the PH he reiterated the submissions made in the application. He was requested to produce the copy agreement between the DCA and the Customers and also to produce billing commission papers between Reliance and the DCA within two days of hearing. He agreed to provide the documents and requested that the case may be decided on above submission at the earliest. 3.2 In this context, the jurisdictional officer submitted that work of DCA is basically to act as a mediator between the principal and the customer. Further as per policy the principal allows early payment incentives to their customers. As per Section 15(3) of CGST Act: The value of the supply shall not include any discount which is given- (a) before or at the time of the supply if such discount has been duly recorded in the invoice issued in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such additional bonus and paying GST thereon. 4.3 The question arises that when the customer request the applicant to make early payment to RIL against the supplies, the applicant makes immediate payment and the customer also make payment within prescribed time limit of 10 days. In this situation the applicant is required to pass on the bonus to the customer as per rate allowed by the principal. The applicant has sought clarification whether such passing on the bonus is in the nature of any supply. 4.4 To clarify the situation, the applicant was asked at the time of personal hearing to submit the DCA- customer agreement also. The applicant vide their letter dated 10.10.2018 submitted that there is no separate agreement with customer in relation to supply of goods or services from the RIL. 4.5 We are of the view that the transaction made between DCA and the Customer for passing on the specified bonus given by the principal is nothing but an additional discount given for early payment made by the customer. In this case there is only one supply made by the principal to the customer. The additional discount relates to supply already made by the principal and passing on s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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