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Taxation Central Ministry of Finance Central Goods and Services Tax Act, 2017

CBIC (GST) Clarification on various doubts related to treatment of secondary or post-sale discounts under GST

12-Sep-2025 | No. 251/08/2025-GST

CBIC (GST) has issued a Clarification on various doubts related to the treatment of secondary or post-sale discounts under GST.

Highlights of the Clarification:
1. The recipient is not obligated to reverse the Input Tax Credit (ITC) related to discounts offered through financial or commercial credit notes, as such discounts do not reduce the original transaction value or the corresponding tax liability.
2. Post-sale discounts offered by the manufacturer to the dealer, pursuant to an agreement with the end customer, are to be treated as part of the overall consideration. Such discounts constitute an inducement for the dealer?s supply to the end customer and must be included in the value of the supply.
3. GST will be applicable on sales promotion activities undertaken by a dealer only if such services are explicitly agreed upon, with clearly defined consideration in the agreement. In such cases, the dealer is deemed to be providing a distinct supply of service to the supplier, attracting GST.

For more information, kindly refer to the attached document.

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