Meaning: Any deduction from the usual cost of goods or services at the time of supply is called Discount under GST. There are three types of discount in accounting viz Cash discount, trade discount,
GST Discount Concept for Valuation
According to the CGST Section 15(3), the value of supply shall not include the below types of discounts.
- A Discount is given before or at the time of the supply. if such a discount has been duly recorded in the invoice issued in respect of such supply.
- Discount is given on Post-sales: if such a discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices.
- Input tax credit as is attributable to the discount on the basis of invoices/debit notes issued by the supplier has been reversed by the recipient of the supply.
Discount on offers: Buy more and Save more
According to the Circular No. 92/11/2019-GST, dt.07.03.2019 discounts offered by the suppliers to customers shall be excluded to determine the value of supply. It includes staggered
Input Tax Credit
The supplier shall be entitled to avail Input Tax Credit on receipt of the above goods or services and capital goods. However, such input must be used in relation to the further supply of goods or services or both on such discounts.
Secondary Discount Concept
There are certain types of discounts
According to the Circular No. 92/11/2019-GST, the credit note(s) can be issued as a commercial transaction between the two contracting parties viz supplier and the receiver. Thus, a secondary discount can be given through credit note after-sales are affected.
- CBIC withdraws Circular No. 105/24/2019-GST dated 28.06.2019 through circular no. 112/2019 dt. 03-10-2019.
- CBIC issued Circular No. 105/24/2019-GST dated 28.06.2019 regarding secondary and post sale discount.
The amount deducted by the seller from the price list of goods or services is called a
It is a type of discount given by the supplier of goods or services to the recipient for making cash
The discount given for purchasing a specific quantity set by the supplier is called Quantity discount under the GST system. For eg. ABC Ltd. Offers a 5% discount for purchasing 1000 pcs branded shoes. Whereas he gives a