Whether gst applicable on amount of credit notes received from supplier in respect of schemes

This query is : Resolved

Anil Bhawasinka (Querist)
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21 March 2023 Credit note received from supplier in respect of schemes passed through sale invoice of FMCG Goods to customer before charging GST and amount credited to trading account.
Department is of the view that the amount of credit notes should be subjected to GST. PL advise . If yes, how it could have been done in GST Return

CA. Bhavik P. Chudasama

CA. Bhavik P. Chudasama (Expert)
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21 March 2023 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.

So it can be concluded that If the discount was given at time or before supply or if there was any agreement at time of supply or before supply of goods then same can be excluded from taxable value for levy of GST