GST ON TRADE DISCOUNT
Query (Issue) Started By: – SAFETAB LIFESCIENCE Dated:- 12-3-2018 Last Reply Date:- 12-3-2018 Goods and Services Tax – GST
Got 3 Replies
GST
Dear Experts,
We are giving post- sales Trade Discount to our customers. The GST rate is for our final products is 12% .
The customer receiving Trade Discount is instructing us to put GST 18% on Discount value and we have given Credit Note with 18% GST several times. We have reduced the Trade Discount Credit Note value in Taxable Sale Value and reduced the 18% GST value from the GST payable in GSTR-3B.
Please confirm the GST rate on Discount 18 % is correct or not. Our GST officials are telling it is wrong and we have to put GST only 12%.
Please clarify with docum
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
been reversed by the recipient of the supply.”
Implies –
Discount, even if not mentioned on the face of the invoice can be reduced from the taxable value, if following conditions are satisfied:
i) Discount is established in terms of an agreement before supply. In simple words, both supplier and recipient are aware and have agreed about the discount before the supply.
ii) Discount is linked to a specific supply invoice.
iii) ITC attributable to the discount is required to be reversed by the buyer or recipient of the supply.
* Satisfying the above conditions, if the Post Sales Trade discount can be linked to the specific supply invoice then the GST applicable on the Credit note raised would be @ 12% and not 18%.
* GSTR 1 should menti
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
e supply can also be excluded while determining the taxable value provided two conditions are met, namely – (a) discount is established in terms of a pre supply agreement between the supplier & the recipient and such discount is linked to relevant invoices and (b) input tax credit attributable to the discounts is reversed by the recipient.
Further, Section 34 of the CGST Act, 2017 provides for issuance of credit notes for post supply discounts within a stipulated time. When such credit notes are issued, obviously it would call for reduction in output liability of the supplier. Hence, the taxes paid initially on the supply would be higher than what is actually payable. In such a scenario the excess tax paid by the supplier needs to be refun
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =