NO GST LIABILITY ON DISCOUNT THROUGH COMMERCIAL CREDIT NOTE & DEBIT NOTE

GST officials have started to conduct audit under section 65 of CGST Act 2017 of various tax payers and facing the issue related to GST applicability on discount income. We will understand the provisions related to GST applicability on discount income received at the time of supply of goods or services or both and discount received after such supply through commercial debit / credit note.

There are some incidences on the basis of that company later on get discount form the manufacturer. The incidences are trade discount of early payments i.e. making payment before the due date, discount on price protection, discount for selling bulk quantity i.e. selling quantity more than targets accepted by company, target incentives, etc. Commercial Credit Note have been issued in favour of the company with respect to the said discount given by such manufacturer and against that company issues Commercial Debit Note in favour of such manufacturer. No GST is being charged on said Commercial debit 

S K and Associates