The CBIC has issued an Circular No. 253/10/2025 – GST dated 01.10.2025, to rolled back its earlier instructions on proving post-supply discount compliance. Now, only the statutory conditions matter, i.e. no extra procedural requirements.

Background 

Circular No. 212/6/2024-GST (dated 26th June, 2024) had earlier prescribed a procedure for suppliers to provide evidence of compliance with conditions of Section 15(3)(b)(ii) of the CGST Act, 2017 (i.e., regarding discounts provided through credit notes and their exclusion from taxable value).

Section 15(3)(b)(ii) allows post-supply discounts to be excluded from taxable value if:  (a) the discount is established in terms of an agreement entered into before or at the time of supply, and
(b) the recipient reverses ITC attributable to such discount.

Clarification by this Circular

The entire prescribed mechanism has been withdrawn. This means suppliers are not bound to follow additional documentary evidence procedures under that circular. They only need to comply with the conditions already set in the law (i.e., section 15(3)(b)(ii)) without any extra procedural burden.

To read the complete Circular https://taxo.online/wp-content/uploads/2025/10/cir-253-10-2025-cgst.pdf