What is a trade discount? A supplier listed the discount in the invoice as the consignee is the distributor in Singapore. Should it be included in the CIF value?
A trade discount is a reduction to the listed price of a product due to commercial considerations such as promoting larger orders (increase in quantity), early payment incentives, cash payment incentives or discounts given in lieu of different trade levels (i.e. distributor, retailer, etc.).
Bona fide trade discounts given by the supplier is accepted by Customs and should be excluded in the computation of GST.
Please request for a letter of explanation from the supplier to provide full details of the discount. If the type of discount was clearly stated in the invoice, you will not be required to obtain a letter of explanation.
Related questions
What are the discounts in the commercial invoice that are not acceptable by Customs? Which are the ones to deduct from the invoice value for GST?
An importer acquires a machine from an overseas supplier. The list price of the machine is S$200 but the supplier grants a 10% trade discount to the buyer because he operates at the retail level of trade, resulting in a total price paid or payable of S$180. What is the Customs value?
I received a discount for my online purchase. Do I have to pay GST for the original value of the purchase before discount?
I have been offered a quantity discount of 10% by my supplier. Should the discount be reflected in the Customs value?
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