GST input and incentives received in case of cement dealers

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Sai bharath Katakam (Querist)
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19 November 2020 Dealers in Cement, Purchases Cement Bags at a higher Price and are insisted to sell at a Lower Price than the Purchase price per Bag.. and Incentives are Given by the company . My query is what is the treatment of accumulated ITC and GST impact on the Incentives Received as there are many type of incentives like target discounts, special incentives, gold discount etc,.

Lekhraj sood

Lekhraj sood (Expert)
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19 November 2020 Though it depends on the terms of the contract to examine that what treatment should be given. However, as a general reply w.r.t such trade practice is that the Cement supplier should issue a credit note with GST and that GST on booking of the credit note by the dealer should reduce the ITC, to the extent of GST shown in the Cr. note, in the hands of dealer.

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