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TMI BlogClarification on various doubts related to treatment of secondary or post-sales discounts under GSTX X X X Extracts X X X X X X X X Extracts X X X X ..... d of Indirect Taxes and Customs, GST Policy Wing on the above subject, which is reproduced hereunder: 2. Circular No. 92/ 11/2019-GST dated 7th March, 2019 was issued providing clarification on various doubts related to treatment of sales promotion schemes under GST. Post issuance of the said Circular various representations have been received from the trade and industry seeking clarifications in respect of tax treatment in cases of secondary discounts or post sales discount. The matter has been examined in order to ensure uniformity in the implementation of the law across the field formations, the Board, in exercise of its powers conferred under section 168(1) of the Central Goods and Services Tax Act, 2017 (hereinafter refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce by dealer to the supplier of goods. The dealer, being supplier of services, would be required to charge applicable GST on the value of such additional discount and the supplier of goods, being recipient of services, will be eligible to claim input tax credit (hereinafter referred to as the ITC ) of the GST so charged by the dealer. 5. It is further clarified that if the additional discount is given by the supplier of goods to the dealer to offer a special reduced price by the dealer to the customer to augment the sales volume, then such additional discount would represent the consideration flowing from the supplier of goods to the dealer for the supply made by dealer to the customer. This additional discount as considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods in view of the provisions contained in second proviso to sub-rule (I) of rule 37 of the CGST Rules read with second proviso to sub-section (2) of section 16 of the CGST Act as long as the dealer pays the value of the supply as reduced after adjusting the amount of post- sale discount in terms of financial / commercial credit notes received by him from the supplier of goods plus the amount of original tax charged by the supplier. 7. All the Deputy/ Assistant Commissioners are requested to bring the contents of the Trade Notice to the notice of all the officers working under their charge and the taxpayers falling under their respective jurisdiction. 8. The Trade Industry Association/ Chambers of Commerce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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