Gst on incentives

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HKB Associates (Querist)
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11 August 2018 A cement dealer is receiving target incentives from the company. my query is that whether receiver issue invoice for claiming incentives and charge gst on it? or comapny will pay incentives with gst? then what to do after reeciving incentives in gst return.
please clear what to do after receiving incentives?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 August 2018 Comapny will pay incentives with gst. Credit note will be issued with GST.
The incentive in your case, is nothing but a form of discount. Discount given after the supply can be reduced from the transaction value subject to satisfaction of the three conditions, viz.,
Terms of discount are established before or at the time of supply
Discount is linked or can be tracked to a particular invoice (ie, it is not on ad-hoc basis)
Recipient should reverse the proportionate amount of ITC pertaining to discount
Therefore, if these conditions are satisfied then the incentive value may be reduced from the transaction value to arrive at the value of supply.

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