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Discount vs Incentive

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NAVEEN

Sr.ACCOUNTANT

172 Points Posted on 30 July 2020

Is any difference between Discount and Incentive Under GST?

Any definition in Gst for incentive ?

Is incentive is service attract Gst?

Replies (6)

Quick Summary

This discussion clarifies the distinction between discounts and incentives within the GST framework. Discounts typically reduce the taxable value of goods to encourage larger purchases. Incentives, often paid to sales staff to boost sales, may be considered a separate service attracting GST. The taxability of post-sale discounts without prior agreement is also explored, with a note that incentives related to non-GST supplies, like petrol and diesel, are not taxable.

Ravi SADhiyan

Practice

3087 Points Posted on 30 July 2020

Originally posted by : NAVEEN
	Is any difference between Discount and Incentive Under GST? Any definition in Gst for incentive ? Is incentive is service attract Gst?

Kindly tells related Service and Goods in which Discount or Incentive are given.

Thanks with Regards

Ravi SADhiyan

NAVEEN

Sr.ACCOUNTANT

172 Points Posted on 30 July 2020

Electronic goods

Ravi SADhiyan

Practice

3087 Points Posted on 31 July 2020

Originally posted by : NAVEEN
	Electronic goods

Difference in Discount and Incentive

1- Discount is give to customer to attract customer for purchase more products. Discount is reduced from total taxable value.

2- Incentive is give to sales person to encourage to sale more product to customer. Incentive as a service consideration to pay sales person .

Kishor Lulla

656 Points Posted on 31 July 2020

No gst on discount subject to conditions.
taxability on incentives, two views, I m of the view that it is taxable as it is a different service other than trading goods.

NAVEEN

Sr.ACCOUNTANT

172 Points Posted on 31 July 2020

Yes But is any definition/ or any other criteria to identify discount and incentive
like post sale discount with out agreement

Is any chance to consider post sale discount without agreement as incentive which attract gst .

debora M

BUSINESS DEVELOPMENT MANAGER

1382 Points Posted on 31 July 2020

GST can be levied only on a consideration received for a taxable supply of goods or services or both. Since your retail sale of petrol & diesel is out of the scope GST net, incentives received by you are against Non-GST supply. Hence such incentives are also not taxable under GST