Enter the partner's annual target, purchases to date and up to four rebate tiers. The calculator projects year-end purchases at the current run rate, shows the rebate accrued and projected, the purchases needed for the next tier and what it unlocks, and the 194R TDS if you settle in cash.
A distributor or dealer rebate is a percentage of purchases returned to the partner at year end for hitting a target. The target is expressed as tiers: 80 percent of target earns 1 percent, 100 percent earns 2 percent, 120 percent earns 3 percent. Accrual is the running estimate of what the partner has earned so far, booked pro-rata on purchases to date at the rate of the tier the partner is projected to reach, which is how this calculator shows it. Every invoice adds to the base, the tier reached decides the rate, and at year end the accrued amount becomes a claim that the partner raises and the brand settles. This calculator projects year-end purchases from the run rate to date, applies the tiers, adds a growth-on-base bonus if you use one, and shows the gap to the next tier so a sales manager can tell the partner exactly what one more order is worth.
Rebate claims go wrong in predictable places. The partner and the brand count different invoices, because returns, cancelled orders and inter-branch transfers are treated differently. Tier boundaries are disputed when a partner lands at 99.4 percent of target. Multiple schemes overlap, and the same invoice is claimed under two of them. Claims arrive months late, after the finance team has closed the year. Across programs Unotag runs, moving the ledger from spreadsheets to a shared, invoice-level accrual visible to the partner every month reduces disputed claim value from a range of 5 to 15 percent to under 2 percent. The practical rules are in how to manage rebate claims and the platform comparison in rebate management companies in India.
Retroactive tiers apply the rate of the tier reached to all purchases. Incremental tiers apply each rate only to purchases above that tier's threshold, like income tax slabs. For a ₹1.2 Cr target and the default tiers, a partner who buys exactly ₹1.2 Cr earns ₹2.4 L retroactively but only ₹24,000 + ₹0 = ₹24,000 incrementally on the ₹24 L between 80 and 100 percent of target. The retroactive version is a far stronger motivator and a far larger liability; it also creates a cliff at each threshold, where a single order can move the whole year's purchases to a higher rate.
| Purchases | Retroactive rebate | Incremental rebate |
|---|---|---|
| ₹96 L (80%) | ₹96,000 (1% of all) | ₹0 |
| ₹1.2 Cr (100%) | ₹2.4 L (2% of all) | ₹24,000 (1% of ₹24 L) |
| ₹1.44 Cr (120%) | ₹4.32 L (3% of all) | ₹72,000 (₹24 L at 1%, ₹24 L at 2%) |
| ₹1.8 Cr (150%) | ₹7.2 L (4% of all) | ₹1.8 L (adds ₹36 L at 3%) |
A credit note reduces what the partner owes on future invoices. It keeps the rebate inside the trade relationship, and GST on it can be adjusted where the rebate was agreed before supply and can be linked to specific invoices under Section 15(3)(b) of the CGST Act. A cash or UPI payout is simpler for the partner to feel, and it is how most loyalty-style rebates are paid, but a benefit paid outside the invoice may fall under Section 194R with 10 percent TDS above ₹20,000 per partner per year. Use the 194R TDS calculator to see the annual outflow, and read how cashback and rebate programs run on Unotag with per-partner ledgers, PAN capture and automatic aggregation. In every case confirm the treatment with your advisor.
Define eligible purchases at invoice level, accrue the rebate monthly against tiers, show each partner a running statement, settle at fixed dates by credit note or payout, and keep one ledger per partner across schemes. Most disputes come from mismatched invoice lists, so share the list monthly.
Rebate management is the process of setting rebate tiers, tracking each partner's purchases against them, accruing the liability through the year, validating claims and settling them by credit note or payout. Done well it turns a year-end argument into a monthly statement both sides trust.
A retroactive rebate applies the rate of the tier reached to all purchases in the year. An incremental rebate applies each rate only to purchases above that tier's threshold. Retroactive tiers motivate strongly and cost more; incremental tiers are smoother and cheaper.
Credit notes keep the rebate inside the trade account and may allow GST adjustment where the rebate was agreed before supply and linked to invoices. Cash or UPI payouts are felt more by the partner but may attract Section 194R TDS above ₹20,000 a year. Confirm with your advisor.
Section 194R covers benefits or perquisites above ₹20,000 per recipient per financial year at 10 percent. Pure trade discounts on invoice are generally treated differently from cash payouts or gifts. This calculator applies 194R only to cash settlement; confirm the facts of your scheme with your advisor.
Accrue monthly, so finance carries an accurate liability and partners can see progress. Settle quarterly or annually, depending on cash flow and scheme rules, and publish the settlement calendar in the scheme circular. Across programs Unotag runs, monthly statements cut claim disputes to under 2 percent of value.