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A post-supply discount is excluded from value ONLY if:
AIt was established in terms of an agreement entered into at or before the time of supply, AND ITC attributable has been reversed by recipient
BRecorded on a credit note any time
CGiven within 6 months
DGiven by way of cash refund
Answer & Solution
Correct answer: A. It was established in terms of an agreement entered into at or before the time of supply, AND ITC attributable has been reversed by recipient
1. Sec 15(3)(b) imposes two conditions for post-supply discount to be excluded from value:
2. (i) The discount was established under an agreement existing at or before the time of supply and is specifically linked to relevant invoices; AND
3. (ii) ITC attributable to the discount has been reversed by the recipient.
_Source: ICAI BoS CA Final Paper 8, Ch 5 "Value of Supply", §Sec 15(3)(b)_
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