New Delhi, Sep 13
The Central Board of Indirect Taxes and Customs (CBIC) has issued a clarification on how secondary or post-sale discounts will be treated under the Goods and Services Tax (GST).
The move comes after several representations were received seeking clarity on whether such discounts affect tax liability and input tax credit (ITC).
“In these cases, the discount is seen as an inducement for supplying goods at a lower price,” as per the circular.
Dealers often carry out promotional activities that benefit their own sales, and therefore such discounts simply reduce the sale price of goods.
The CBIC has asked tax authorities to publicise these clarifications to ensure uniformity in the application of GST law across the country.