CBIC has issued Circular No. 253/10/2025-GST (1st Oct 2025), marking a significant simplification in compliance requirements for post-sale/secondary discounts under Section 15(3)(b)(ii), CGST Act.
Key Highlights:
•The previous mechanism (Circular 212/6/2024-GST) mandated that, before treating post-sale discounts as non-taxable, suppliers had to obtain a CA/CMA certificate or recipient’s undertaking as proof of corresponding ITC reversal. This process was cumbersome and a compliance hurdle for many businesses.
•The new circular WITHDRAWS this requirement entirely. Now, suppliers are no longer required to collect or submit any documentary proof (certificate/undertaking) of ITC reversal to exclude post-sale discounts via credit notes from taxable value under Section 15(3)(b)(ii).
•This move promotes uniformity and significant ease of doing business. Only the substantive legal conditions need to be met; no additional procedural documentation is required from suppliers.
•Field officers and taxpayers should note: Trade notices will follow, explicitly instructing that GST officers must not insist on such certificates/undertakings for these cases.
Why is this important?
✓ Removes a key compliance bottleneck for legitimate post-sale/secondary discounts.
✓ Shifts the focus to substance over paperwork—fulfilling Section 15(3)(b)(ii) conditions is what matters.
✓ Aligns with the spirit of CBIC’s recent clarification (Circular 251/08/2025-GST) that only “true and clear” discounts, not linked to other supply/service, are allowable as deduction (except for separate promotional/service agreements).
Takeaway for Businesses & Professionals:
• No more CA/CMA certifications or recipient ITC undertakings for each discount cycle.
• Maintain standard documentary trail for discounts and credit notes, but focus on legal essence, not certification paperwork.
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