New GST Circulars Clarify ITC on Post-Sale Discounts and Insurance Claims

The CBIC has issued new circulars on GST, mandating that suppliers giving post-sale discounts must ensure clients reverse the ITC on those discounts via a CA certificate or an undertaking. This aims to provide clarity on the documentation process for suppliers and insurance companies regarding ITC claims and reimbursements.

The Central Board of Indirect Taxes and Customs (CBIC) has issued new guidance on GST, requiring suppliers who provide post-sale discounts through credit notes to ensure their clients have reversed the Input Tax Credit (ITC) availed on those discounts.

This can be evidenced by a Chartered Accountant (CA) or Cost Accountant (CMA) certificate or an undertaking. The circular aims to clarify the documentation process for suppliers while also impacting the industry by making the compliance process more meticulous but ultimately beneficial in the long term.

Additionally, a separate circular clarified that insurance companies are eligible to claim ITC on motor vehicle repair expenses if incurred under reimbursement claims, provided the documentation is correctly issued. These new guidelines seek to reduce disputes between businesses and the tax department by ensuring consistent application of GST rules.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)