GST Council Recommends Changes to Post-Sale Discount Rules Under CGST Act

The GST Council, in its 56th meeting held on Wednesday, September 3, 2025, made recommendations regarding the GST rate rationalisation, giving relief to the common man and the middle class. One of the recommendations given by the council is to amend sections 15 and 34 of the CGST Act, 2017, for the post-sale discount. Let us understand these amendments.

Omission of section 15(3)(b)(i): Section 15(3)(b)(i) of the CGST Act, 2017, requires that the discount must be based on an agreement made before or at the time of such supply and must be specifically linked to invoices. The GST Council has recommended removing this requirement.

Amend section 15(3)(b): section 15(3)(b) of the CGST Act, 2017, is recommended to be revised to allow a discount if it is given through a GST credit note issued under section 34 of the CGST Act. Additionally, it has been suggested to add a reference to section 15(3)(b) and require the recipient to reverse input tax credit (ITC) when the supplier issues a credit note for the post-sale discount and reduces the value of the supply.

Removal of Circular: The circular No.212/6/2024-GST is being revoked. This circular explained the compliance with the conditions under Section 15(3)(b)(ii) about the discounts.

To avoid confusion and legal disputes, the council has suggested issuing a new circular to give clarification on some issues related to post-discount in the following cases:

• Non-reversal of ITC for post-sale discount through a financial or commercial credit note.
• The treatment of the post-sale discount given by the manufacturer to the dealer as an extra consideration.
• Treatment of post-sale discount as consideration for promotional activities, etc., carried out by the dealer.