Discount given by manufacturers to retailers, prima facie, cannot be considered as a consideration for services rendered by the retailer

Last updated: 30 May 2025

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The Delhi High Court has ruled that discounts provided by manufacturers to retailers should not, at first glance, be considered as payment for services rendered by the retailer. This decision came in a case where the tax authorities sought to levy GST on these discounts as income. The court's preliminary view suggests that such discounts are not taxable consideration for services, potentially impacting how GST is calculated on such transactions.

Court :
Delhi High Court

Brief :
The Hon'ble Delhi High Court in the case of Vardhaman Electronics v. Additional Commissioner, CGST Delhi West & Ors. [W.P. (C) 6334/2025 & CM APPL.28843/2025 dated May 13, 2025] held that the discount given by manufacturers to retailers, prima facie, cannot be considered as a consideration for services rendered by the retailer.

Citation :
W.P. (C) 6334/2025 & CM APPL.28843/2025 dated May 13, 2025

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1 Year PLAN - Rs.~~1999~~

1799

(Excl. of GST ₹323)

2 Years PLAN - Rs.~~3499~~

3149

(Excl. of GST ₹566)

BEST VALUE

3 Years PLAN - Rs.~~4999~~

4499

(Excl. of GST ₹809)

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Attached File : 671907_5858_vardhaman_electronics.pdf

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Judgement posted by

Bimal Jain

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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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