Glossary
Indian trade, scheme & rebate glossary
The vocabulary of Indian channel trade — schemes, claims, rebates and GST — defined in plain English. If a term trips up your claims or settlement conversations, it is probably here.
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30 terms, defined
- Primary sales
- Sales from a manufacturer to its distributors — the “sell-in” to the channel.
- Secondary sales
- What a distributor sells onward to the next tier (retailers or sub-dealers) — the sell-through, not just what the distributor bought.
- Secondary scheme
- A trade scheme that rewards secondary sales (the distributor’s sell-through) rather than primary purchases.
- Scheme leakage
- The share of a trade-promotion or scheme budget lost to over-claims, duplicate claims, unclaimed accruals, manual errors and slow reconciliation.
- Trade promotion / trade spend
- The budget a manufacturer spends on channel incentives — schemes, rebates and discounts — to drive sales through the channel.
- Rebate
- An amount credited back to a channel partner for meeting agreed conditions such as volume, value or growth — usually settled after the sale.
- FOC (free-of-cost) scheme
- A scheme that rewards purchases with free goods (for example, buy 10 get 1 free) instead of a cash rebate.
- Slab scheme / volume slab
- A tiered scheme where the rate depends on the band (slab) the volume reaches; once a slab is reached, its rate typically applies to the whole volume.
- Stepped scheme
- A marginal scheme where each band’s rate applies only to the volume that falls within that band, then the bands are summed.
- Tiered scheme
- A scheme where the rate comes from the tier a partner is assigned to (for example Gold or Silver), rather than from volume alone.
- Super-stockist
- A channel tier that buys from the manufacturer and supplies distributors — common where direct distributor reach is limited.
- C&F agent (CFA)
- A carrying-and-forwarding agent that holds and forwards a manufacturer’s stock to distributors — common in pharma and FMCG.
- Distributor / stockist
- A channel partner that buys from the manufacturer (or super-stockist / CFA) and sells onward to retailers.
- Chargeback
- A claim a partner raises to recover an agreed amount — a rebate, scheme payout or price difference claimed back from you.
- Billback
- Often used interchangeably with chargeback for a claim you receive; on a special-pricing agreement it can specifically mean a periodic claim (versus a per-deal one).
- Deduction / debit note
- An amount a customer takes off an invoice (a debit note), which you then reconcile and either accept, dispute or write off.
- Credit note
- A document that reduces an amount owed; a GST (Section 34) credit note also adjusts the supplier’s output tax.
- Section 34 (CGST Act)
- The GST provision under which a supplier issues a tax-bearing credit or debit note for a post-sale adjustment.
- Rule 53(1A) (CGST Rules)
- The rule that specifies the particulars a GST credit or debit note must carry to be valid.
- ITC reversal
- The input-tax-credit reversal a recipient must make when a supplier issues a credit note that reduces tax.
- GSTIN
- The 15-character GST Identification Number of a registered taxpayer.
- HSN code
- The Harmonised System of Nomenclature code that classifies goods for GST.
- Place of supply
- The rule that decides whether a supply is intra-state (CGST + SGST) or inter-state (IGST).
- Accrual
- The running liability a manufacturer books for a scheme or rebate as it is earned, before it is claimed and settled.
- Settlement
- Paying out or crediting what has been earned and claimed — typically via a credit note.
- Reconciliation
- Checking a partner’s claim against the agreement and the underlying transactions, and resolving the differences.
- Special pricing agreement (SPA) / ship-and-debit
- An arrangement where a partner sells at an agreed special price and claims the difference back from the vendor.
- Stock / price protection
- Recovery of the value lost when a manufacturer cuts the price of stock a distributor still holds.
- Net-net margin
- What is left of gross sales after all trade spend — rebates, schemes, deductions and allowances — is taken off.
- Claim reversal
- Reversing a previously posted or settled claim (for example when it is cancelled), with an offsetting entry rather than a deletion.
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