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India: Tax treatment of post-supply discounts, premium on share issuances

India: Tax treatment of post-supply discounts

The KPMG member firm in India has prepared reports about the following tax developments (read more at the hyperlinks provided below).

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  • Input tax credit not available for post-supply discounts: The Authority for Advance Ruling, Tamil Nadu ruled that an input tax credit (ITC) is available only to the extent of payments made by the recipient to the supplier. In other words, an input tax credit attributable to post-supply discounts is not available regardless of the fact that the supplier has discharged tax on the full value of the supply. Read a March 2019 report [PDF 543 KB]

  • Amount raised on issuance of shares at premium is taxable: The Supreme Court of India concluded that the amount raised by the taxpayer from various companies by means of shares issued at a premium is subject to income tax. The case is: NRA Iron & Steel Pvt Ltd. Read a March 2019 report [PDF 682 KB] 

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