GST
TRT-2025-
Date:-12-09-25
In:-
Issue Favourable to Tax Payer ?:-
Here’s a crisp summary of Circular No. 251/08/2025-GST dated 12th September, 2025 in pointers:
Input Tax Credit (ITC) on discounts via credit notes
- Suppliers can issue financial/commercial credit notes (without reducing tax liability).
- Recipient is not required to reverse ITC since transaction value and tax charged remain unchanged.
Post-sale discount to dealer/distributor
- If dealer sells goods to end-customer independently (principal-to-principal basis), discount is not treated as consideration for supply of goods.
- If manufacturer has an agreement with end-customer for discounted supply, discount given to dealer for passing on benefit will be treated as inducement of Supply and forms part of consideration.
Post-sale discount vs. promotional activities
- General discounts merely reduce sale price and are not consideration for services to manufacturer.
- If dealer provides defined promotional services (e.g., advertising, co-branding, campaigns) under agreement with manufacturer, GST is payable on such services.
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