GST on Post Sale Discounts - First Relief by Madras High Court

Vivek Jalan | Last updated: 24 February 2024

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The Madras High Court has provided initial relief regarding Goods and Services Tax (GST) on post-sale discounts. The court clarified that Section 15(2)(e) of the GST Act applies only when a portion of the payment for a supply is subsidised, and a discount itself is not a subsidy. Therefore, discounts offered by suppliers or manufacturers generally cannot be included in the 'transaction value' unless they are linked to a subsidy provided by a third party.

The Big Question? Is GST discount a Supply of Services 1. Channel Discount - From OEM to Wholesaler (WS) through Distributor (DBT) 2. Passback discount - From OEM to distributor / Down supply chain Madras High Court on Post Sale Discounts M/s SUPREME PARADISE Vs ASSISTANT COMMISSIONER

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About the Author

Vivek Jalan

DESIGNATED PARTNER

Mr. Vivek Jalan is a FCA, Qualified LL.M (Constitutional Law) and LL.B. He is the Chairman of The Fiscal Affairs and Taxation Committee of The Bengal Chamber of Commerce and Industry. He is the Convenor on Indirect Taxes of the CII- Economic Affairs and Taxation Committee (ER); He is also a visiting faculty for Indirec ... Read more

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