CBIC clarified that when sellers provide discounts, GST will now be levied on the discounted price rather than the original list price.
Businesses also get relief on input tax credit (ITC): they need not reverse ITC when discount credit notes are issued without changing tax amounts.
These clarifications are expected to ease compliance burdens and reduce litigation risk for sellers in multi-tiered supply chains.
Additionally, the government is set to launch 90% instant refund of ITC starting November to improve cash flow for businesses.
The process of GST registration is being simplified to reduce complexity and speed onboarding of new businesses.
All these reforms signal a push toward making the tax system more flexible and business-friendly.
Sectors with high dependency on supply chain credits — like retail, manufacturing, and FMCG — are
likely to benefit the most.
Consumer sentiment may improve as clarity reduces risk in pricing and discount practices.
The reforms may also help smaller firms who often struggle with cash flow tied to delayed
input credit.
These policy tweaks come just ahead of broader reforms (like GST 2.0), underscoring government’s attempt
to smooth transition.