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TMI Blog2019 (11) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... he applicant/distributor is eligible to avail ITC shown in the inward invoice received by him from the supplier of goods / principal company. Whether the discount provided by the Principal Company to their dealers through the applicant as shown in Annexure D attracts any tax under the GST laws? - HELD THAT:- The additional discount given by the supplier through the applicant; which is reimbursed to the applicant is to offer a special reduced price by the distributor / applicant to the customers and hence the amount represent consideration paid by the supplier of goods / principal company to the distributor / applicant for supply of goods by the distributor / applicant to the customer - Therefore, this additional discount reimbursed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Castrol brand industrial and automotive lubricants. There is a written agreement between Principal and the applicant about the distributorship. The Principal Company is controlling and managing the entire marketing activities of their products. The Principal Company's software is mandatory to all distributors and only through, that software any distributor could conduct further supply of the products. The Principal Company is having various rate scheme with dealers. As the Principal Company is having sole control over the billing software, the distributors or dealers can supply any goods of the company only through this software. The Principal Company is issuing invoices at a price to its distributors and the distributors supplying th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ritten agreement between the Principal Company and their dealers and also an agreement between the principal and distributors. The authorized representative was heard. It is pointed out that each products are Identifiable with product code and invoice pricing is on the basis of the Master software system being controlled by the Principal Company and the distributors has no control on it. The modus operandi of the distribution of products is explained with an example as shown below. The agent of M/s. Castrol India Lid, at Palakkad issued an invoice to the applicant for a product with code No, 3380747 MGO OW20 210L with taxable value of Rs,58,083/- and collected 18% GST of ₹ 10,455/-. The distributor subsequently rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... input tax credit. The additional discount / scheme discount is given by the applicant to the customers as directed by the supplier of goods / principal company and is intended to augment the sales volume by the offer of special discounted price to particular category of customers as Identified / determined by the supplier of goods / principal company. As submitted by the applicant; the applicant has no control either on the quantum of scheme discount to be offered or on the category of customers to whom the scheme discounts are to be offered. The discounts so offered as per instructions of the supplier of goods / principal company are completely reimbursed by the supplier of goods / principal company. In the facts of the instant c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the statement of the applicant that the prices of the products supplied by the applicant is determined by the supplier /principal company and the applicant has no control on the price of the products. Therefore, it is evident that the additional discount given by the supplier through the applicant; which is reimbursed to the applicant is to offer a special reduced price by the distributor / applicant to the customers and hence the amount represent consideration paid by the supplier of goods / principal company to the distributor / applicant for supply of goods by the distributor / applicant to the customer. Therefore, this additional discount reimbursed by the supplier of goods / principal company to the distributor / applicant is liab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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