Post supply discounts and price reductions after supply not eligible for deduction from value :
Giving trade discounts and price reductions during negotiations after supply of goods and services is very common in business. However, if such post supply discounts were not anticipated at the time of supply, it is not allowed to be deducted from value. This provision completely ignores business reality as post supply negotiations and price reductions are common in business.
Further, if payment is not made to supplier within 180 days, input tax credit has to be reversed with interest though Government has received full amount of service tax. This is double whammy.