TMI Blog2019 (10) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... nt received by the applicant is in the form of an incentive provided by the authorised supplier and does not affect the sale price of the goods already sold and hence there is no liability to charge GST on the same. Further, the applicant when sells more than his target is eligible for the incentive which is provided by the authorised supplier in the form of a credit note without affecting the sale price of the goods purchased or sold. Even this is in the form of incentive and no adjustment of price nor tax is done either by the applicant or the authorised supplier - Hence, the amount received by the applicant is in the form of an incentive provided by the authorised supplier and does not affect the sale price of the goods already sold a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant furnishes some facts relevant to the stated activity: a. The applicant states that he is in the business of supplying motor vehicles. He is the authorised dealer for Harley-Davidson India (hereinafter called authorised supplier ) who manufactures high end two wheeler motorcycles. The applicant in its regular course of business purchases the vehicles from the authorised supplier wherein it charges 28% GST plus applicable Cess. b. The Authorised supplier allows credit period of 30 days and also fixes sales targets to the applicant. Besides, on purchase of vehicles which are over and above the limit fixed on regular purchases, the applicant is also eligible for volume discount, which is paid on monetary terms. c. Hence, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he credit note. The applicant is also not claiming any reduction in input tax credit already claimed by him as it does not affect the price of the goods sold. Hence, the amount received by the applicant is in the form of an incentive provided by the authorised supplier and does not affect the sale price of the goods already sold and hence there is no liability to charge GST on the same. 4.2 Further, the applicant when sells more than his target is eligible for the incentive which is provided by the authorised supplier in the form of a credit note without affecting the sale price of the goods purchased or sold. Even this is in the form of incentive and no adjustment of price nor tax is done either by the applicant or the authorised suppli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence in view of the above, the credit note issued by the supplier in the pertinent case does not have any effect on the value of supply and hence is only a financial document for account adjustment for the incentive provided. Hence there is no effect on the GST. 5. In view of the foregoing, we rule as follows RULING 1. The Volume Discount received on purchases in the form of credit note without any adjustment of GST is not liable for GST. 2. The Volume Discount received on Retail (on sales) in the form of credit note without any adjustment of GST is not liable for GST. 3. Since the amount received in the form of credit note is actually a discount and not a supply by the applicant to the authorised supplier, the applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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