The Central Board of Indirect Taxes and Customs (CBIC) has announced new regulations for suppliers offering post-sale discounts through credit notes under the Goods and Services Tax (GST) regime. The latest directive requires suppliers to ensure that clients provide an undertaking or a certificate from a Chartered Accountant (CA) confirming the reversal of Input Tax Credit (ITC) availed on the discount value. At present, there is no effective mechanism to monitor whether ITC on such discounts has been appropriately reversed.
Saurabh Agarwal, Tax Partner at EY, highlighted the significance of these documents, which will now come with a unique ID number. They serve as essential evidence during audits and ensure consistent application of GST rules pertaining to post-sale discounts.
