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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Value of Supply

A supplier sells goods for ₹2,00,000 and issues an invoice with no mention of any discount. A month later, under a volume rebate arrangement that was not agreed at or before the time of supply, it gives the buyer a ₹10,000 discount. Is this post-supply discount excluded from the value of supply under Section 15(3)?

No. A discount given after the supply is excluded only if it is established under an agreement made at or before the supply and linked to specific invoices, and the recipient reverses the related input tax credit. With no prior agreement, the ₹10,000 discount stays in value.

  1. AYes, any post-supply discount is excluded automatically
  2. BYes, provided the buyer pays within 30 days
  3. CNo, because it is not established in terms of an agreement entered into at or before the time of supplyCorrect
  4. DNo, because post-supply discounts are excluded only for services

Explanation

Section 15(3)(b) requires the post-supply discount to be established under an agreement made at or before the supply and specifically linked to relevant invoices, and the recipient must reverse the attributable ITC. Here no prior agreement exists, so the first condition fails and the discount is not excluded.

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