The Commercial Taxes Department, Tamil Nadu on July 12, 2024, issued a notification regarding the Mechanism for providing evidence of compliance of conditions of Section 15(3)(b)(ii) of the TNGST Act, 2017 by the suppliers.
The following has been stated namely: -
• The issue arises to provide a suitable mechanism for enabling the suppliers as well as tax officers to verify fulfilment of the condition of section 15(3)(b)(ii) of the TNGST Act regarding proportionate reversal of input tax credit by the recipients in respect of such discounts given by the supplier by issuing tax credit notes after the supply has been effected.
• It has been clarified that Section 15 of the TNGST Act provides for value of taxable supply of goods or services or both. Sub-section (3) of the said section provides that the value of supply shall not include discount given by the supplier, subject to certain conditions. As per clause (b) of the said sub-section, any discount which is given after the supply has been effected shall not be included in the value of the supply, only if it satisfies certain conditions
• Accordingly, wherever any discount is offered by the supplier to the recipient, by issuance of a tax credit note as per section 34 of the TNGST Act, after the supply has been effected, the said discount can be excluded from the value of taxable supply.
• Till the time a functionality/facility is made available on the common portal to enable the suppliers as well as the tax officers to verify whether the input tax credit attributable to such discounts offered through tax credit notes has been reversed by the recipient or not, the supplier may procure a certificate from the recipient of supply, issued by the Chartered Accountant (CA) or the Cost Accountant (CMA), certifying that the recipient has made the required proportionate reversal of input tax credit at his end in respect of such credit note issued by the supplier.
[Notification No. 6/2024]
