Value of Supply

Manav Dixit

Proportionate credit is reversed by the recipient is one of the condition to exclude discount in the value of supply (after the TOS) It means suppose i am a recipient and i purchased a good of 1 lakh from you for sale and after a month you give me a cash back ( as per agreement at TOS ). So , earlier i availed itc on the good of 1l when i buy , i have to reverse the proportionate amount of itc that amount of cash back i received . Otherwise the discount will not be excluded from VOS

Thread Starter

What if the recipient is an unregistered person?how can reverse the credit ?

Manav Dixit

If the person is unregistered, he didn't claim itc and then the condition of reverse of proportionate itc is not available. Only 2 condition will be check for deducting discount in vos i.e. a term of agreement and linked to invoice.... If we want to deduct the value of supply then value of GST also less, thats why we have to reverse that proportionate amt of itc but if the person is unregistered or regd person still not claim itc then we don't need to check this condition.