In re Rajesh Kumar Gupta of M/s. Mahveer Prasad Mohanlal (GST AAR Madhya Pradesh)
Q1. Whether the applicant can avail the Input Tax Credit of the full GST charged on invoice of the supply or a proportionate reversal of the same is required in case of post purchase: –
a. Cash discount for early payment of supply invoices(bills) given by the supplier of goods to the applicant without adjustment of GST.
b. Incentive/schemes provided through credit note without adjustment of GST by the supplier to the applicant.
The applicant can avail the Input Tax Credit of the full GST charged on the invoice of the supply and no proportionate reversal of ITC is required in respect of commercial credit note issued by supplier for Cash discount for early payment of supply invoices(bills) and Incentive/schemes provided without adjustment of GST, if the said discount is not covered under Section 15(3)(b) of CGST Act, 2017 and the said discounts is not in terms of prior agreement. This is subject to the conditions that the GST paid for the said goods/service is not reversed or reimbursed / re-credited by the supplier to the applicant in any manner.
Q2. Whether GST is leviable on cash discount offered by supplier to applicant through credit note without adjustment of GST for making the early payment from the date stipulated for payment of such supply as output supply? If yes, then what is the applicable HSN and rate of GST and Whether GST is leviable on incentive/schemes provided through credit note without adjustment of GST by the supplier to the applicant (dealer) as output supply? If yes, then what is the applicable HSN and rate of GST?
Since the amount received in the form of credit note is actually a discount and not a supply by the applicant to the supplier, no GST is leviable on receiver on cash discount/incentive/schemes offered by the supplier to applicant through credit note against supply without adjustment of GST.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH
PROCEEDINGS
(Under sub-section (4) of Section 98 of Central Goods and Service Tax Act, 2017 and the Madhya Pradesh Goods & Service Tax Act, 2017)
1. Shri Rajesh Gupta, proprietor of M/s Mahaveer Prasad Mohanlal is carrying on the business of whole sale trading of rice and pulses. Henceforth, for brevity Shri Rajesh Gupta, proprietor of M/s Mahaveer Prasad Mohanlal shall be called as “Applicant”. Applicant is having the dealership of famous rice brand name of India known as “India Gate Basmati Rice” since last more than 15 years.
2. The provisions of the CGST Act and MPGST Act are identical, except for certain provisions. Therefore, unless a specific mention of the dissimilar provision is made, a reference to the CGST Act would also mean a reference to the same provision under the MPGST Act. Further, henceforth, for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST or MP GST Act would be mentioned as being under the GST Act.
BRIEF FACTS OF THE CASE AND SUBMISSION OF THE APPLICANTS IN THEIR APPLICATION IS AS UNDER-
3.1 The Applicant is having the dealership of famous rice brand name of India known as “India Gate Basmati Rice” since last more 15 years. That for the purpose of brevity, the supplier of India Gate Basmati Rice to the applicant shall be called as “Supplier”.
3.2 As a routine, supplier dispatches the goods along with invoice. The supplier offers the incentive for early payment of invoice (bills) by offering a cash discount if payment is made before the due date or with in the certain days from the date of invoice inter alia: –
