Home Case Index All Cases GST GST + AAAR GST - 2021 (7) TMI AAAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (7) TMI 789 - AAAR - GSTLevy of GST - Valuation - supply of Castrol brand Industrial and automotive lubricants bearing HSN code 2710 - discount provided by M/s. Castrol to their dealers through the appellant - amount received as reimbursement of discount or rebate provided by M/s. Castrol as per written agreement between the Principal and their distributors - reversal of proportionate input tax credit - amount shown in the commercial credit not issued to the appellant by M/s. Castrol - applicant paying tax and availing credit received by them from the Principal Company Castrol or their stockists. Whether the discount provided by M/s. Castrol to their dealers through the appellant attracts any tax under GST? - HELD THAT:- Section 15 of the CGST Act states that the value of supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of supply are not related and price is the sale consideration for the supply - the discount on the value of supply can be allowed only if the discount granted is in agreement with the provisions of Section 15(3) of the CGST Act, 2017. First scheme of the discount is the one that is known at or prior to the point of time of supply, where the quantum of discount is indicated/reflected in the invoices and the GST is paid on the discounted amount of transaction value. Another scheme of discount offered is on post sale basis, wherein the amount of discount may be known at the point of supply but may not be quantified; or some discounts may not even be known at the time of supply of goods. In both these post sale discounts, discounts are extended through credit notes. These post sale discounts therefore are subjected to GST at the time of supply - the additional discount reimbursed by M/s. Castrol, is liable to be added to the consideration payable by the customers or dealers to the appellant. The appellant is liable to pay GST at the applicable rate. Whether the amount shown in the commercial credit not issued to the appellant by M/s. Castrol attracts proportionate reversal on Input Tax Credit? - HELD THAT:- M/s. Castrol is issuing commercial credit notes, hence are not eligible to reduce their original tax liability. Thereby the appellant will not be liable to reverse the ITC attributable to the commercial credit notes issued to them by M/s. Castrol. Is there any tax liability under GST laws on the appellant for the amount received as reimbursement of discount or rebate provided by M/s. Castrol as per written agreement between the Principal and their distributors? - HELD THAT:- The additional discount in the form of reimbursement of discount or rebate, received from M/s. Castrol over and above the invoice value is liable to be added to the consideration payable by the customer to the appellant for the purpose of arriving at the value of supply of the appellant to the customer as per provisions of Section 15 of the CGST/SGST Act. Further, the customer, if registered, would only be eligible to claim ITC of the tax charged by the appellant only to the extent of the tax paid by the said customer to the appellant. In view of second proviso to Section 16(2) of the CGST/SGST Act.
|