ITC can be admissible of the full GST charged on the undiscounted supply invoices of goods/ services by their suppliers, however proportionate reversal of the credit not required in case of post-purchase discount.

Where discount was availed by applicant-recipient post supply of goods/services and post issue of invoices, it can avail Input Tax Credit only to extent of invoice value raised by suppliers less discounts i.e. discounted price paid by him to suppliers-

Para 4.3. “Section 16(1) states that a registered recipient is eligible to take credit on the input tax charged on any supply of goods or services. As per section 9(1), CGST tax is leviable on the value of supply as determined by section 15. Section 15 (3) states that value of supply does not include any discount which is given before or at the time of the supply if such discount has been duly recorded in the invoice issued in respect of such supply and those discounts given after the supply has been effected, if such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices and input tax credit as is attributable to the discount on the basis of document issued by the supplier has been reversed by the recipient of the supply. Time of supply of goods as per section 12 is the earlier of the following dates, namely the date of issue of invoice by the supplier or the last date on which he is required, under sub-section (1) of section 31, to issue the invoice with respect to the supply or the date on which the supplier receives the payment with respect to the supply”

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Also, in the matter of Commissioner of Trade Taxes, Delhi v. Challenger Computer Ltd referred in Appeal (C ) No. 18421 of 2016, the Supreme Court  held that Where assessee purchased goods after payment of VAT and received discount from selling dealer subsequent to sales and further claimed ITC on such purchases and entire amount of VAT collected by selling dealer from assessee was deposited to department and HC setting aside orders of lower authorities allowed assessee’s claim for ITC, SLP filed against judgment of HC was liable to be dismissed.

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