{"id":2535,"date":"2025-09-16T03:35:08","date_gmt":"2025-09-16T03:35:08","guid":{"rendered":"https:\/\/bhatiabhola.com\/?p=2535"},"modified":"2025-09-16T03:35:10","modified_gmt":"2025-09-16T03:35:10","slug":"gst-circular-251-2025-dated-12-09-2025-clarification-on-various-doubts-related-to-treatment-of-secondary-or-post-sale-discounts-under-gst","status":"publish","type":"post","link":"https:\/\/bhatiabhola.com\/index.php\/blog\/2025\/09\/16\/gst-circular-251-2025-dated-12-09-2025-clarification-on-various-doubts-related-to-treatment-of-secondary-or-post-sale-discounts-under-gst\/","title":{"rendered":"GST Circular 251\/2025 Dated 12\/09\/2025 &#8211; Clarification on various doubts related to treatment of secondary or post-sale discounts under GST\u00a0"},"content":{"rendered":"\n<p>\u00a0The circular provide clarifications relating to treatment of secondary or post-sale discounts under GST.\u00a0<\/p>\n\n\n\n<p><em>&#8212; ITC Reversal on Receipt of Post-Sale Discounts \u2013 Whether a dealer\/recipient needs to reverse ITC if the manufacturer issues a financial\/commercial credit note without tax adjustment \u2013<\/em><strong>&nbsp;<\/strong>It is clarified that the recipient will not be required to reverse the Input Tax Credit attributed to the discount provided on the basis of financial\/ commercial Credit notes issued by the supplier, as there is no reduction in the original transaction value of the supply and accordingly the corresponding tax liability would also not get reduced. Since the supplier\u2019s tax liability and the transaction value remain unchanged, ITC reversal is not required.&nbsp;<\/p>\n\n\n\n<p><em>&#8212; Treatment of Discounts as Consideration for Dealer\u2019s Supply to End Customer \u2013 Whether a post-sale discount is effectively a payment from the manufacturer for the dealer\u2019s onward supply to the end consumer \u2013<\/em><strong><\/strong>In a principal-to-principal transaction, the dealer becomes the owner of the goods; the discount merely reduces purchase cost and is not an inducement for supply. However,<strong>&nbsp;<\/strong>Where the manufacturer has an agreement with the end customer for supply at a concessional rate, and issues credit notes to enable the dealer to pass on such benefit, the discount will be treated as consideration\/inducement.&nbsp;<\/p>\n\n\n\n<p><em>&#8212; Treatment of Discounts as Consideration for Promotional Services \u2013 Whether post-sale discounts represent consideration for promotional activities performed by dealers (e.g., sales drives, marketing support) \u2013<\/em><strong>&nbsp;<\/strong>Ordinary discounts are not linked to any independent service; they are merely a reduction in purchase price. Therefore, it is clarified that post-sale discounts offered by manufacturers to dealers in such cases shall not be treated as consideration for a separate transaction of supply of services. However,<strong>&nbsp;<\/strong>where a dealer undertakes specific sales promotional activities, such as co- branding, advertisements, exhibitions, or customer support are expressly agreed with defined consideration, GST is payable on such services. In such cases, the dealer provides a distinct service to the supplier, and accordingly, GST would be chargeable.&nbsp;<\/p>\n\n\n\n<p><a href=\"https:\/\/taxinformation.cbic.gov.in\/view-pdf\/1003287\/ENG\/Circulars\"><em>(GST Circular 251\/2025 Dated 12\/09\/2025)<\/em><\/a><em><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u00a0The circular provide clarifications relating to treatment of secondary or post-sale discounts under GST.\u00a0 &#8212; ITC Reversal on Receipt of [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"enabled":false},"version":2}},"categories":[6,27],"tags":[],"class_list":["post-2535","post","type-post","status-publish","format-standard","hentry","category-gst","category-circulars-gst"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>GST Circular 251\/2025 Dated 12\/09\/2025 - Clarification on various doubts related to treatment of secondary or post-sale discounts under GST\u00a0 - Bhatia Bhola &amp; 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