Amount received as Reimbursement/ Discount/ Rebate from Principal Company to be taxable under GST

Last updated: 02 September 2021

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The Kerala Appellate Authority of Advance Ruling has ruled that Santhosh Distributors Kottayam is liable to pay GST on amounts received as reimbursement for discounts or rebates from the principal company, Castrol India Ltd. This reimbursement is considered an addition to the consideration payable by customers. While the appellant must pay GST on these reimbursements, they are not required to reverse Input Tax Credit related to commercial credit notes issued by the principal company.

Court :
Kerala Appellate Authority of Advance Ruling (KAAAR)

Brief :
The Hon'ble Kerala Appellate Authority of Advance Ruling ("KAAAR") has held that additional discount reimbursed by the Principal Company is liable to be added to the consideration payable by the customers or dealers to the Appellant and appellant is liable to pay GST at the applicable rate.

Citation :
Order No. AAR/10/20 dated March 01, 2021

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1 Year PLAN

1999

(Excl. of GST ₹359)

2 Years PLAN

3499

(Excl. of GST ₹629)

BEST VALUE

3 Years PLAN

4999

(Excl. of GST ₹899)

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Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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