Goods and Services Tax – Started By: – Kaustubh Karandikar – Dated:- 28-12-2018 Last Replied Date:- 31-12-2018 – XYZ is issuing invoice for the supply of goods and charging full GST on the full value of the invoice. At the bottom of the invoice, a remark is given as if payment is received within 7 days, 2% discount will be given . Can XYZ subsequent to supply issue credit note with GST to the customer for 2% discount if the payment is received within 7 days and reduce his GST liability in that month to the extent of the GST on 2% discount shown in the credit note? – Reply By KASTURI SETHI – The Reply = This is called conditional discount which was not allowed in Central Excise. Regarding discount status quo is maintained in GST regime. Conditional discount does not conform to the parameters of pre-known or at the time of sale/supply. The element of uncertainty is present notwithstanding terms and conditions in a contract. Hence not admissible. This is my view. – Reply By Alkesh Jani –
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is very clear that the date of issuance of Invoice is the time of supply and as at the time of supply the discount of 2% is duly recorded in the Invoice, the supplier is required to reverse the ITC as attributable to the discount. In my view the procedure adopted by the querist is correct. Any different view by our experts in the matter is highly solicited. Thanks, With regards, – Reply By KASTURI SETHI – The Reply = Re-examined the whole issue in depth. I agree with Sh.Alkesh Jani Ji. If discount is genuine and has been passed on to the buyer and also established on the basis of records maintained by the supplier. Invoice itself is an agreement for this purpose. Just For knowledge sake (Case pertained to pre-GST era) The issue of Conditional discount is pending with the the Supreme Court. The party filed appeal as the party lost the case in the Tribunal. Business Auxiliary Service – Additional discount extended to wholesalers/distributors for providing weekly report/inventory relating
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n the specified format based on which H.P. decides on their business policy relating to marketing, etc. Such discount pertained to Business Auxiliary Services provided by the assessee to H.P. and leviable to Service Tax. [Iris Computers Ltd. v. Commissioner – 2018 (11) G.S.T.L. J80 (S.C.)] = 2017 (11) TMI 1491 – SUPREME COURT – Reply By Kaustubh Karandikar – The Reply = Respected Mr. Jani and Sethi, Thanks for your valuable guidance. but i had the following apprehentions: As per Section 34(1) of CGST Act, 2017, Credit Note can be issued only under the following situations by the registered person, who has supplied goods or services or both: Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficien In view
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