GST – Discount Schemes And Credit Notes Changes By Budget 2026

Discount provisions

Section 15(3) of CGST Act allows deduction of eligible discounts from the value of supply, subject to condition that the discount was known and agreed upon before or at the time of supply and linked to the relevant tax invoice.

The above condition was a significant compliance hurdle in real-world commercial practices, as most of the time, the discounts are passed on without any pre-agreed arrangements, making such discounts ineligible for deduction from value of supply.

Pursuant to the representations by various industries, the Government proposed the following amendments to the discount provisions in the 56th GST Council meeting, -

• Omit the requirement of linkage of discounts with the agreements and invoices