EXTRAORDINARY
Department of Finance
Office of the Commissioner of Commercial Taxes
Subject: Clarification on various doubts related to treatment of secondary or post-sale discounts
under GST-reg.
Ref.: Circular No. 251/08/2025-GST dated 12th September, 2025 issued under the Central Goods
and Services Tax Act, 2017 by the GST Policy Wing, Central Board of Indirect Taxes and
Customs, Department of Revenue, Ministry of Finance, Government of India, New Delhi.
Circular
(No. 01/2025-26-GST)
The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry
of Finance, Government of India, New Delhi has issued the above referred Circular.
For the uniformity in implementation and in exercise of the powers conferred under Section 168 of the
Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular
issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,
Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the
Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).
A copy of the above referred circular is attached herewith as Annexure.
Difficulty, if any, in implementation of this circular may please be brought to the notice of the
undersigned.
Given under the seal of this office.
Vishant S. N. Gaunekar, Commissioner of State Taxes, Goa.
Panaji.
No. CCT/26-4/2025-26/H/3029
Date : 10-Oct-2025
Suggestions are welcomed on e-mail: [email protected]
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RNI No. GOAENG/2002/6410
Panaji, 10th October, 2025 (Asvina 18, 1947)
SERIES II No. 28
PUBLISHED BY AUTHORITY
ANNEXURE
Circular No. 251/08/2025-GST
F. No. CBIC-20001/3/2025-GS-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
North Block, New Delhi
Dated the 12th September, 2025
To,
The Principal Chief Commissioners/Chief Commissioners of Central Tax (All)
The Principal Director Generals/Director Generals (All)
Madam/Sir,
Subject: Clarification on various doubts related to treatment of secondary or post-sale discounts
under GST-reg.
Representations have been received seeking clarifications in respect of tax treatment in cases of
secondary discounts or post-sale discount.
2. The matter has been examined. In order to ensure uniformity in the implementation of the law across
the field formations, the Board, in exercise of its powers conferred under sub-section (1) of Section 168 of
the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “the CGST Act”) clarifies the
issues as under:
S. No.
Issue
Clarification
1.
Whether the full input tax
credit is available to the
recipient of supply when the
recipients make discounted
payments to the supplier of
goods on account of financial/
/commercial
credit
notes
issued by the said supplier?
1. Section 16 (1) of the CGST Act, 2017 provides that every registered person
shall be entitled to take credit of input tax charged on any supply of goods
or services or both, which are used or intended to be used in the course or
furtherance of his business.
2. It has been clarified vide circular No. 92/11/2019-GST dated 7th March,
2019 that the supplier of goods can issue financial/commercial credit notes
and in such cases, he will not be eligible to reduce his original tax liability.
As the transaction value is not allowed to be reduced on account of
issuance of financial/commercial credit note, accordingly the tax charged
from the recipient would also not get reduced.
3. Thus, 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.
2.
Whether a post-sale discount
offered by a manufacturer to
its dealer/distributor, would
be treated as a consideration
paid by the manufacturer for
the dealer’s supply of the
same
goods
to
the
end
customer as a monetary value
of the inducement to supply
of goods manufactured by
him to the end customer?
1. Section 2 (31) of the CGST Act, 2017 defines consideration as to include
the monetary value of any act for the inducement of the supply of goods or
services, whether by the recipient or by any other person.
2. In cases where there is no agreement between the manufacturer and the end
customer, there are two independent sale transactions, one from the
manufacturer to the dealer and the other from the dealer to the end
customer. The essence of the matter is that in a contract of sale, the sale is
completed on the transfer of title to the goods to the buyer. Once this
happens, the buyer becomes the owner of the goods, and the seller has no
vestige of the title or claims therein. The dealer takes ownership of the
goods purchased from the manufacturer and subsequently sells them to the
end customer and transaction between the manufacturers to dealer operates
978
OFFICIAL GAZETTE — GOVT. OF GOA
SERIES II No. 28
(EXTRAORDINARY)
10TH OCTOBER, 2025
on a principal-to-principal basis. These discounts are simply given for
competitive pricing to push sales and merely reduce the sale price of the
goods and are not linked to any independent activity rendered to the
manufacturer. Therefore, it is clarified that such a discount cannot be
included in consideration as the monetary value of the inducement of
further supply of these goods.
3. However, in cases where the manufacturer has some agreement with an
end customer to supply goods at a discounted price, the manufacturer
may issue commercial or financial credit notes to the dealer, enabling
such dealer to provide the goods at the agreed discounted rate to the end
consumer. Therefore, it is clarified that such a post-sale discount, given
by the manufacturer to the dealer for supplying goods to the end
customer at a discounted rate, should be included in the overall
consideration as it is an inducement towards the supply of goods by
the dealer to the end customer.
3.
Whether a post-sale discount
extended
by
the
manufacturer to the dealer
can
be
treated
as
a
consideration in lieu of the
activities
performed
to
promote
the sale of the
goods?
1. The matter has been examined. When dealers receive such post-sale
discounts, they may engage in promotional activities to boost sales.
However, these activities ultimately enhance the sale of goods that the
dealers themselves own, thereby increasing their own revenue. In this
context, the discount merely reduces the sale price of the goods and is
not linked to any independent service rendered to the manufacturer.
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.
2. However, GST would be leviable in cases where a dealer undertakes
specific sales promotional activities, such as advertising campaigns, co-
branding, customization services, special sales drives, exhibition
arrangements, or customer support services, etc., only when such
services are explicitly stated in the agreement with a clearly defined
consideration payable for such a supply. In such cases, the dealer
provides a distinct service to the supplier, and accordingly, GST would
be chargeable.
3. It is requested that suitable trade notices may be issued to publicize the contents of this circular.
4.
Difficulty if any, in the implementation of this circular may be brought to the notice of the
Board.
Yours faithfully,
(Gaurav Singh)
Commissioner (GST).
__________
Subject: Withdrawal of circular No. 06/2024-2025-GST dated 30th July, 2024–reg.
Ref.: Circular No. 253/10/2025-GST dated 1st October, 2025 issued under Central Goods and
Services Tax Act, 2017 by the GST Policy Wing, Central Board of Indirect Taxes and
Customs, Department of Revenue, Ministry of Finance, Government of India, New Delhi.
Circular
(No. 02/2025-26-GST)
No. CCT/26-4/2025-26/H/3030
Date : 10-Oct-2025
979
OFFICIAL GAZETTE — GOVT. OF GOA
SERIES II No. 28
(EXTRAORDINARY)
10TH OCTOBER, 2025
The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry
of Finance, Government of India, New Delhi has issued the above referred Circular.
For the uniformity in implementation and in exercise of the powers conferred under Section 168 of the
Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular
issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,
Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the
Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).
A copy of the above referred circular is attached herewith as Annexure.
Difficulty, if any, in implementation of this circular may please be brought to the notice of the
undersigned.
Given under the seal of this office.
Vishant S. N. Gaunekar, Commissioner of State Taxes, Goa.
Panaji.
____________
ANNEXURE
Circular No. 253/10/2025–GST
F. No. CBIC-20001/3/2025-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
******
North Block, New Delhi,
Dated the 1st October, 2025
To,
The Principal Chief Commissioners/Chief Commissioners (All)
The Principal Directors General/Directors Generals (All)
Madam/Sir,
Subject: Withdrawal of circular No. 212/6/2024-GST dated 26th June, 2024–reg.
Kind attention is invited to circular No. 212/6/2024-GST dated 26th June, 2024 wherein clarifications
were given in relation to mechanism for providing evidence of compliance of conditions of Section 15(3)(b)
(ii) of the CGST Act, 2017 by the suppliers.
2. In order to ensure uniformity in the implementation of the provisions of the law across field
formations, the Board, in exercise of its powers conferred by Section 168(1) of the Central Goods and
Services Tax Act, 2017, hereby withdraws circular No. 212/6/2024-GST dated 26th June, 2024. Therefore,
the procedure prescribed vide the aforesaid circular for providing evidence of compliance of conditions of
Section 15(3)(b)(ii) shall not be required.
3. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.
4. Difficulty, if any, in implementation of this circular may please be brought to the notice of the Board.
Yours faithfully,
(Gaurav Singh)
Commissioner (GST).
980
OFFICIAL GAZETTE — GOVT. OF GOA
SERIES II No. 28
(EXTRAORDINARY)
10TH OCTOBER, 2025
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