Treatment of secondary or post-sales discounts under GST vide Circular No. 105/24/2019-GST dated 28-06-2019
> CBIC has clarified the treatment of post sales discount citing three situations based on -the nature of the discounts. The situations has been cited here-in-below:
| Situation – 1 | Additional discount is offered in lieu of additional activity/ promotional campaign by dealer |
| Treatment | Promotional activity shall be treated as a separate transaction. The dealer shall become supplier of service and the supplier becomes recipient. |
| Value of Supply | Additional Discount offered |
| ITC Admissibility | Supplier shall be eligible to claim credit |
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| Situation – 2 | Additional discount is offered to dealer in order to sell the goods at a special reduced price to the customer |
| Treatment | Additional discount would represent consideration flowing from the supplier of goods to the dealer for the supply made by the dealer to the customer |
| Value of Supply | Additional Discount offered + Consideration payable by the customer |
| ITC Admissibility | Customer, if registered, shall be eligible to claim credit |
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| Situation – 3 | Post sales discount has been offered by way of Financial / commercial credit notes |
| Treatment | ITC shall not be reversed on such post-sales discount received provided the dealer pays the value of supply (net of discount) along with tax originally charged |
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Dear Sir,
Please refGST Circular dtd 28.06.2019 towards clarification on post sale discounts under GST,
Requesting you to confirm on the effective date applicable on sales under this notification.