If a dealer/recipient is granted only if certain obligations, such as advertising, exhibitions, sales, etc., are fulfilled, these discounts are considered a separate transaction. This is where the refuelling was granted after delivery. However, it was agreed at the time of delivery and can be attributed to the corresponding invoice. It is therefore permissible to be deducted from the transaction value. XYZ is facing serious liquidity problems and asks WHL to pay within 2 days. It offers an additional 1% discount. WHL agrees and pays. This discount was not known at the time of delivery, so it cannot be used as a transaction value deduction for the calculation of the GST. The bill will therefore be the same as at the top. Section 15 (3) of the CGST Act, 2017 deals with the deduction of the rebate granted by the goods/services provider to the recipient of the taxable value of the delivery of goods/services. The reduction in turnover may be due, depending on the terms of the contract, either at the end of the deadline or after reaching the target turnover.
This discount is granted either before, at the time of delivery or after delivery. However, in accordance with the details of the Circular No. 92/11/2019-GST CBIC of March 7, 2019, a supplier may issue a financial credit for such discounts. These credits do not have a GST. There is a lot of confusion between the company and CA`s about the treatment of various discounts offered and received by a company. The discount granted after delivery must be definitively fixed in the form of a tax value deduction agreement: the treatment of the discount in the supplier`s and recipient`s books depends on the conditions under which this discount was granted. One of the important points to consider is whether or not the discount was agreed upon at the time of the sale. XyZ Ltd issues a credit to TDR for 20 ru. (0.5% of Rs 4,000 – Rs 20 – GST@ 18% on Rs 20 – Rs 3.60) which must be linked to the corresponding tax bill. This is where the refuelling was granted after delivery.
However, it was agreed at the time of delivery and can be attributed to the corresponding invoice. It is therefore permissible to be deducted from the transaction value. After deducting the discount value of the taxable value of the delivery, the GST liability is calculated on the net amount, i.e. (taxable value – discount). Under the GST, assessing the taxable benefit is a critical aspect. While the evaluation of the offer must be taken into account different points and such an area is discounts and its treatment. In other words, the discount granted after delivery is excluded from the value of the delivery if the following conditions are met. The rebate tax credit has been cancelled by the recipient of the offer and the account is treated in the same way. In the common use of the language, the discount granted after delivery is called mail delivery.