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All QuestionsCategory: GST LitigationDISCOUNT UNDER GST
Profile photo of Biswarup NeogiBiswarup Neogi asked 4 months ago


Respected Sir/Mam I am a distributor and my mother company reimburse us the trade discount given to retailers generating credit notes. No GSt involvement is there nor We raise any tax invoice to mother Co. for that reimbursement. Sir/mam at the time of assessment is there any chance of arising gst liability on the same. If yes what should I do? Sir/mam Kindly advice us..

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1 Answers
Profile photo of Consultease AdministratorConsultease Administrator answered 4 months ago

yes especially now when CBIC has tried to clarify this issue. We have a video on this specific issue. Discount under GST may sometimes be an incentive and not a discount.
You should check section 15 of CGST Act. If it fulfills the conditions given in section 15 only then any tax reversal is allowed. If you are not claiming any tax reversal, still you may face demand. Any additional activity done for supplier and any amount paid for that will be an incentive and not a discount under GST. In this case, you are liable to raise an invoice and collect the tax. Pls check the recent clarification by CBIC for discounts and incentives.