Post Discount Sales

Dear Naveen
Before I reply to your Query I would like to throw some light on Section 15(3)(b)(I)(ii) which prescribes the provision on Post Discount.

Section reproduced:
(I) such discount is established in terms of an agreement entered into at or before the time of such supply & specifically linked to relevant Invoices and
ii) Input Tax credit as attributable to the discount on the basis of document issued by supplier has been reversed by Recepient.

So As per above mentioned the Post supply discount will be Depend upon following Factors :
1. Whether the discount has been allowed as per Agreement
2. Can credit note for discount can be linked to relevant Invoice.
3. whether the Recepient has reverse the input credit against the credit Note.

Now come to your Query ....

Circumstances A : Supplier cannot Reduces Output Tax Liability , means cannot give effect To GST Tax by issuing credit note , in short have to issue financial credit notes

Circumstances 2 : The Agreement is established but if the Relevant invoice can be linked if yes then Supplier can reduce his output tax liability by issuing credit note for discount .

Note : As per sub clause (ii) supplier should make sure that Recepient has reversed the input against the Credit Note issued .
The benefit of reduction of output tax available to supplier only when Recepient has also reduce his input.