TREATMENT OF DISCOUNT UNDER GST – SECTION 15(3) OF CGST ACT 2017 https://taxguru.in/goods-and-service-tax/treatment-discount-gst-section-153-cgst-act-2017.html As per Section 15(3) of CGST Act: – The value of the supply shall not include any discount which is given–– (a) before or at the time of the supply if such discount has been duly recorded in the invoice issued in respect of such supply; and (b) after the supply has been effected, if— (i) such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices; and (ii) input tax credit as is attributable to the discount on the basis of document issued by the supplier has been reversed by the recipient of the supply. Explanation of the Section 15(3): Amount of discount should be reduced from value of supply if – (a) Discount is allowed at or before time of supply and amount of discount is mentioned on Invoice and; (b) Discount is allowed after supply has been effected if – (i) Discount is given in terms of an agreement that existed at the time of supply and every invoice raised earlier discounted and; (ii) Recipient (Purchaser) has reversed the Input tax credit availed which is attributable to discount (Generally, such discounts are passed on by the supplier through credit notes and Purchaser, by considering those credit notes in GSTR-3B, reverse the ITC). Examples of Discounts under section 15(3)(b): I. Buy more Save More – E.g.- Get 10 % discount for purchases above Rs. 5000/-, 20% discount for purchases above Rs. 10000/- etc. II. Periodic/Year ending Discount – E.g. – Get additional discount of 1% if you purchase 10000 pieces in a year, get additional discount of 2% if you purchase 15000 pieces in a year etc.
Treatment of Discount Under GST – Section 15(3) of CGST Act 2017
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