GST on Incentives recd
Query (Issue) Started By: – Ethirajan Parthasarathy Dated:- 13-2-2019 Last Reply Date:- 14-2-2019 Goods and Services Tax – GST
Got 4 Replies
GST
Petroleum Companies pay incentives (sort of quantity discount) for dealers, depending on their off take.
\nAre dealers liable to pay GST on such incentives received.
\nReply By KASTURI SETHI:
\nThe Reply:
\nDear Querist,
\nIncentive on what supply of goods by the Petroleum Cos. ?
\nAs per Section 15 (3) of CGST Act, 2017, discount shall not be included into the transaction value for the purpose of payment of GST. Hence GST is not payable on the element of discount. Relevant portion of section 15 is appended below:-
\n(3) The value of the supply shall not include an<\/p>\n
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\nThe Reply:
\nI agree with the views given by the experts.
\nThis issue has also been a bone of contention during the erstwhile Service Tax Regime where there have been cases relating to Advertising Companies or Motor Vehicle Dealers etc where they have been given discounts based on the turnover achieved by them during the financial year . This discount normally is given after the end of the financial year. These discounts normally do not feature in Agreements and are generally decided by the company after the completion of the financial year based on their results.There are more than enough case laws in the erstwhile Service tax regime where attempts to charge service tax on incentives have been quashed by adjudicating au<\/p>\n
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