Question

Here is a pertinent question I want to check your view regarding eligibility of ITC on post supply commercial credit note. AAR has given adverse ruling in MRF case as below: -

https://www.business-standard.com/article/economy-policy/mrf-can-avail-input-tax-credit-only-for-invoice-value-tamil-nadu-authority-119031900114_1.html

However I strongly believe that discount particularly when it is of pass through nature i.e. given by manufacturer to the super stockist and same discount passed by the super stockist to the wholesalers, then for the super stockist it is actually just an adjustment entry and hence his proportionate ITC should not be reversed.....
 

Answer

In case of MRF, the discount is given post supply but it was as per agreement decided before supply.

In your case discount is given post supply by issuing commercial credit note, so the aforesaid ruling will not apply in your case and you are not liable to reverse the ITC availed because in commercial credit note tax amount is not reflected, only value is adjusted. Therefore there is no need for reversal of ITC against commercial credit note (Reply dt 04/06/2019)