Clarification on various doubts related to treatment of secondary or post-sales discounts under GST

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..... 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 Commissioner, in exercise of its powers conferred under section 168(1) of the Delhi Goods and Services Tax Act, 2017 (hereinafter referred to as the DGST Act ) clarifies the issues in succeeding paragraphs. 2. For the purpose of value of supply .....

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..... 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. 4. 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 consideration, payable by any person (supplier of goods in this case) would be liable to be added to the consideration payable by the .....

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..... nd proviso to sub-section (2) of section 16 of the DGST 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. 6. It is requested that suitable trade notices may be issued to publicize the contents of this circular. 7. Difficulty if any, in the implementation of this circular may be brought to the notice of Policy Branch, Trade Taxes Department, Government of NCT of Delhi. (H. Rajesh Prasad) Commissioner, GST - Circular - Trade Notice - Public Notice - Instructions - .....

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