In the absence of necessary information regarding the passing over of discount by the supplier through the credit notes, this authority cannot issue any ruling on the question.
Authority for Advance Ruling — Taxability on Discount received through credit notes – The applicant purchases consumer products mainly from M/s. HUL since 2017-18. The Supplier would subsequently issue credit notes of discount after the supply of goods to the applicant as a distributor on the basis of the targeted quantity offered by them. The applicant would transfer this discount as such to his various resellers or retailers in accordance with the terms and conditions and instructions of the First Supplier, acting as a pure agent of the Supplier. The applicant sought an advance ruling as to whether there is any further tax liability on the discount received through credit notes issued by the M/s. Hindustan Unilever Ltd., in the light of the 1st proviso to Section 34 of Act, 2017; whether the essence of the advance ruling given by the Hon’ble Kerala Authority for Advance Ruling in M/s. Santhosh Distributors is applicable; if the first supplier issued credit notes showing GST and the applicant treated it as commercial credit notes, what are the consequences of such transactions; if any error has occurred in the monthly submission of GST return for the year 2017-18 on the basis of discount concepts, what are the steps to be taken to rectify such errors for the years 2017-18 and 2018-19.
Held that:- The Hon’ble Authority for Advance Ruling ruled out that the provisions governing the value of taxable supply are contained in Section 15 of the Act. The applicant has not produced any details regarding the nature of discount received through credit notes. In the absence of sufficient information this authority is not in a position to issue ruling. The remaining questions being not in respect of any matter specified under Section 97 (2) of the Act and this authority has no jurisdiction to issue ruling on the same for the reasons.
In the absence of necessary information regarding the passing over of discount by the supplier through the credit notes, this authority cannot issue any ruling on the question.
Authority for Advance Ruling — Taxability on Discount received through credit notes – The applicant purchases consumer products mainly from M/s. HUL since 2017-18. The Supplier would subsequently issue credit notes of discount after the supply of goods to the applicant as a distributor on the basis of the targeted quantity offered by them. The applicant would transfer this discount as such to his various resellers or retailers in accordance with the terms and conditions and instructions of the First Supplier, acting as a pure agent of the Supplier. The applicant sought an advance ruling as to whether there is any further tax liability on the discount received through credit notes issued by the M/s. Hindustan Unilever Ltd., in the light of the 1st proviso to Section 34 of Act, 2017; whether the essence of the advance ruling given by the Hon’ble Kerala Authority for Advance Ruling in M/s. Santhosh Distributors is applicable; if the first supplier issued credit notes showing GST and the applicant treated it as commercial credit notes, what are the consequences of such transactions; if any error has occurred in the monthly submission of GST return for the year 2017-18 on the basis of discount concepts, what are the steps to be taken to rectify such errors for the years 2017-18 and 2018-19.
Held that:- The Hon’ble Authority for Advance Ruling ruled out that the provisions governing the value of taxable supply are contained in Section 15 of the Act. The applicant has not produced any details regarding the nature of discount received through credit notes. In the absence of sufficient information this authority is not in a position to issue ruling. The remaining questions being not in respect of any matter specified under Section 97 (2) of the Act and this authority has no jurisdiction to issue ruling on the same for the reasons.