Coca-Cola India’s bottling partner Hindustan Coca-Cola Beverages (HCCB) and distributors of FMCG and consumer durable firms have come under the lens of the goods and services tax (GST) authorities over so-called post-sale discounts offered by manufacturers, said a person familiar with the matter. 

The authorities have asked why GST was not paid on these discounts, treating them as services by distributors. In some cases, authorities have sought sales details for the past five years from distributors. 

That’s stumped the industry for which such discounts are commonly used to promote sales, prompting it to lobby the government for relief. 

A spokesperson for HCCB, which accounts for two-thirds of Coca-Cola India’s volumes, said the company operates in “full compliance” with regulations. “It is critical to note that none of the past assessments, nor the judicial precedents on this issue, have treated the said expenses as being in the nature of any ‘service’ rendered by the distributors to the company,” an HCCB spokesperson said in an email. 

Source://economictimes.indiatimes.com/articleshow/69260412.cms?