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Volume and early-payment rebates promised in supplier agreements are never invoiced, and the buyer forgets to claim them.
Compare agreement terms with actual purchases or payment dates each quarter, compute the rebate due, and request a credit note with the calculation attached.
Supplier agreements with rebate clauses, the purchase register by supplier, payment dates, and a rebate tracker per supplier.
A quarterly list of rebates due, claimed and received, with unreceived credit notes chased before the GST time limit.
A rebate you have earned but never received a credit note for is money owed to you. Compare the rebate terms in your agreement with your actual purchases, work out what is due, and ask the supplier for the credit note with your calculation attached. Do it before the GST deadline for credit notes passes, because after that the supplier can no longer reduce the GST.
On the Seven Classes of Reconciliation Leakage, an unclaimed rebate is Discount leakage: an agreed reduction in price that never reached your books.
How do I work out the rebate I have earned?
| Rebate type | Basis | Period | Evidence needed |
|---|---|---|---|
| Volume slab | Purchases above a target value or quantity | Usually the financial year or a quarter | Agreement clause, purchase register by supplier |
| Early payment | Invoice paid within an agreed number of days | Each invoice | Invoice dates, bank payment dates |
| Scheme or target | Supplier’s promotional scheme | Scheme period | Scheme circular, purchase register |
| Growth | Purchases above the previous year | Financial year | Both years’ purchase totals |
Worked example: a ₹54,000 rebate to claim
Joshi Distributors buys from one supplier under an agreement that gives 1.5 percent on purchases above ₹1,50,00,000 in the financial year. Purchases for FY 2025-26 came to ₹1,86,00,000.
| Step | Calculation | Amount |
|---|---|---|
| Purchases in the year | From purchase register | ₹1,86,00,000 |
| Less: threshold | As per agreement | ₹1,50,00,000 |
| Purchases above threshold | ₹1,86,00,000 − ₹1,50,00,000 | ₹36,00,000 |
| Rebate at 1.5 percent | ₹36,00,000 × 1.5 percent | ₹54,000 |
By June 2026 no credit note had arrived. Joshi Distributors writes to the supplier with the agreement clause, a supplier-wise purchase summary listing every invoice, and the ₹54,000 calculation.
If the rebate were on all purchases rather than only those above the threshold, the figure would be ₹2,79,000. Read the clause carefully: it decides which.
What does the credit note do to my books and GST?
- In the books: the supplier’s balance reduces by the credit note value, and your purchase cost goes down.
- In GST: if the supplier issues a GST credit note, the value of the supply falls, so you reverse the input tax credit on it. For a rebate of ₹54,000 plus GST at 18 percent, that is ₹9,720 of input credit reversed.
- Time limit: under Section 34 of the CGST Act, the supplier must declare a GST credit note by 30 November after the end of the financial year, or the annual return date if earlier. For FY 2025-26 that means by 30 November 2026 at the latest.
- For GST to reduce, the discount must be agreed in advance and linked to specific invoices, under Section 15. A rebate in the agreement signed before the purchases usually meets that test.
After the deadline, the supplier can still give you a commercial credit note without GST. You still get the money, just with no GST adjustment.
How do I keep a rebate tracker?
- List every supplier agreement with a rebate clause.
- For each, note the type, rate, threshold, period and the clause reference.
- Each quarter, pull purchases by supplier from Tally or Zoho Books and compare with the threshold.
- Record rebate earned, claimed, credit note received, and amount.
- Chase anything claimed but not received for more than 30 days.
- Before 30 September each year, review the past year’s open rebates so there is time before the November deadline.
Credit notes, once received, should match the vendor ledger and the bank. TransactIG matches bank statement lines to the books with an exception queue and audit-ready exports; see reconciliation software India.
What to read next
- Revenue leakage recovery playbook
- Debit note and credit note under Section 34
- What is revenue leakage?
Content authored by practitioners with experience at Amazon India, Intuit QuickBooks, and the Tata Group. Meet the team →