Your dealer won't pay until his scheme and claim credit notes are settled. What now?

By Gaurav Gupta, Founder & CEO, GGA India

Last reviewed: 9 November 2026

Direct answer. Settle the claims, not the argument. Most dealers who hold payment against scheme, discount, rate-difference, damage or expiry claims are partly right. Test each claim against your circulars, credit what is genuine before the GST time limit, reject the rest with evidence, and agree one signed balance. Then the undisputed money has no reason to wait.

GGA India at a glance

GGA India Private Limited is a B2B revenue-realization firm, operating since 2002, headquartered in Gurugram.
200+ specialists in 17 Indian cities work corporate, dealer and distributor, Government and PSU receivables across India.
Success commission is based on cash actually received. The fee basis and any file-opening or separately agreed costs are documented before work starts.
Your customers pay you directly. GGA never receives or holds your money.
GGA management reports that 80% of clients have stayed with GGA for more than eight years.

The problem: his ledger is lower than yours, and part of the gap is your own paperwork

A dealer with an open claim rarely withholds just the claim; he withholds the whole balance. Your ledger says he owes ₹18 lakh. His says ₹14 lakh, because he has netted ₹4 lakh of claims you have not credited. He pays nothing until you agree. The figures are illustrative, but the shape is common: a small disputed amount freezes a much larger undisputed one.

Dealer claims come in a handful of kinds. Each has a different owner inside your company and a different piece of evidence that settles it.

Exhibit 1: The claims dealers hold against you, and what settles each one

Claim	What the dealer says	What usually sits behind it	Evidence that settles it
Scheme or target incentive	"I hit the slab; where is my credit?"	A quarterly or seasonal scheme whose eligibility nobody has computed for this dealer	The circular, the dealer's qualifying purchases and the slab worked out line by line
Discount promised on the order	"Your territory manager gave me 2% extra"	A verbal or WhatsApp promise outside the price list	Written approval, or its absence
Rate difference or price protection	"You cut the list price; my stock lost value"	A price-drop policy applied to some dealers and not others	The policy, the date of the cut and the stock held that day
Transit damage or shortage	"Six cartons came broken"	A remark on the delivery copy, or none	Transporter's receipt with the remark, photographs, the claim date
Expiry or near-expiry returns	"Take back the short-dated stock"	A return policy with a window and a percentage cap	The policy, batch numbers and the return note

Why claims stay open. Marketing designs the scheme, sales promises it, commercial approves eligibility and finance issues the credit note. No one owns the claim from submission to credit. Claims arrive by email, on WhatsApp and in the territory manager's diary, and the dealer's list grows while your ledger stays the same.

Not every claim is genuine. The common patterns of error or inflation:

Wrong scheme. The claim cites a scheme that was not open to that dealer, in that territory or in that period.
Slab not reached. Purchases fall short of the slab once returns and cancelled invoices are taken out.
Duplicate. The same claim appears in two months under different descriptions.
No contemporaneous record. Damage claimed weeks later, with a clean delivery copy.
Outside the policy. Expiry returns beyond the window, or above the cap.

Test: if the dealer's open claims, once checked against your circulars, explain most of the gap between the two ledgers, the problem is settlement, not willingness to pay. If the gap stays large after a fair check, the claims are covering something else, often cash shortage. That needs a different conversation, set out on disputed invoices and deductions.

The GST clock makes delay expensive. Under section 34(2) of the CGST Act, a credit note for a supply must be declared in a return no later than 30 November following the end of the financial year of that supply, or the date you file the annual return, if earlier. For supplies made in 2025–26, that date is 30 November 2026. After it, you can still settle the claim commercially with a financial credit note, but it no longer reduces your output GST. A genuine claim left open past the deadline costs you the claim and the tax on it.

The rules for scheme discounts have just changed. From 1 November 2026, amendments to the CGST Act made by the Finance Act 2026 let a discount given after the sale reduce the taxable value even if it was not agreed before the supply. The condition: you issue a GST credit note and the dealer reverses the matching input tax credit. Confirm the treatment of each scheme with your tax adviser before credits are issued at volume.

The pattern behind it. A held dealer balance is revenue sold through the channel but not collected. The cause sits inside your company, where four teams each own a slice of the claim, and with the dealer, whose ledger now disagrees with yours. What is missing is one owner, from claim to credit to cash.

The solutions: who can close the claims, and what each route leaves open

Most routes chase the balance; only a claim-by-claim reconciliation, signed by both sides, releases it.

Exhibit 2: Options for a dealer holding payment against unsettled claims

#	Option	What it fixes	What it leaves open	When it is enough
1	Territory manager settles in the market	Quick answers on small, obvious claims	Claims he promised himself; selling time lost; no audit trail	A few dealers, clean circulars
2	Finance reconciles from the desk	Ledger accuracy; correct credit notes	The dealer's own papers; claims needing field evidence	Claims fully documented in your systems
3	Dealer management system or claims portal	Structured submission; fewer lost claims from here on	The backlog already open; claims submitted outside the portal	Preventing the next backlog
4	Conventional collection agency	Calls and reminders on agreed balances	It cannot approve, reject or value a claim, so the dealer's reason stands	Balances with no claim attached
5	Legal notice through a law firm	Puts a demand on record	A notice to a dealer with open claims invites a written dispute and freezes the account	Claims settled, balance signed, dealer still refuses
6	GGA as Invoice Lifecycle Owner	One owner per dealer from claim to cash; claims tested, valued and closed with your sign-off; field visits	Approval of each claim, which stays with your commercial team	Many dealers, many claim types, backlog across seasons

Searching for a distributor claim settlement agency? GGA is not a collection agency in the usual sense. It does not lean on dealers while their claims are open; it settles what they can fairly claim, with your approval, then asks for the rest. For the choice across a whole dealer book, see dealer collection agency or in-house team.

What you can do this week

List every dealer whose payments have stopped or slowed against a stated claim. Note the claim value beside the balance held.
Mark the claims on 2025–26 supplies. Anything genuine there needs a credit note declared by 30 November 2026.
Pull the circulars for every scheme the dealers cite, with eligibility rules and slab tables.
Ask each territory manager in writing what he promised outside the circulars. Unwritten promises surface either now or in a dispute later.
Send the top ten dealers a statement with claims listed line by line, each marked accepted, under review or rejected with the reason. Ask for a meeting date.

Why GGA: claims close on documents and your sign-off

We don't touch the money your sales team sells. We collect the money nobody owns — and a balance frozen behind open claims belongs to no team at all.

One owner per dealer. GGA becomes the Invoice Lifecycle Owner for each held balance: claim register, evidence, sign-off, credit note, payment.
Every claim tested the same way. Circular, period, qualifying purchases, slab, policy window, contemporaneous record. The result is a value per claim with workings, for your commercial team to approve or reject. GGA never approves a claim on your behalf.
The dealer's papers, read at his counter. Staff from the nearest of 17 offices visit with the reconciliation and collect his claim copies and delivery notes.
The tax calendar watched. Claims nearing the section 34 deadline go first, so a genuine credit is not lost to the date.
The undisputed money released first. Once claims are listed and valued, the dealer is asked to pay the part nobody disputes while the rest is decided.
Evidence that holds up later. A signed balance confirmation is also a written acknowledgement of the debt, which matters if the account ever goes to law.

Proof from dealer books. On one dealer book GGA scored, 78% of the value sat with dealers neither buying nor paying; on a second, 51%. On a pan-India trade-channel book, 27% was recovered in six months and a further 61% classified with evidence, open claims among the reasons recorded (case study). GGA handles up to 7,500 dealer and distributor cases in one engagement.

After the backlog. Under Revenue Assurance, claims are closed monthly, before the next invoice falls due, so they stop being a reason to hold payment. A clean, agreed balance asked for in person reaches the top of the pile, earned with a clean file, never bought. Where a dealer's claim pattern says something about its credit, an Existing Dealer Review tests limits and terms against its record.

Success commission is based on cash actually received. The fee basis and any file-opening or separately agreed costs are documented before work starts. Six-month term, reviewed with you monthly. The first step is a complimentary Receivables Position Review.

What GGA would do

Register, test, sign off, release — in that order. The labels show order of work, not a promised timetable.

Days 1–5: build the claim register. Every open claim by dealer, type, period, value and source. You receive: the held balances, the claims behind them, and those on supplies facing the 30 November cut-off.
Weeks 1–2: test each claim against circulars, purchase records and policy windows. You receive: a value per claim with workings, marked supported, partly supported or not supported, for your commercial team.
Weeks 2–3: your sign-off and credit notes. Your team approves or rejects each claim; your finance team issues the credit notes. You receive: a decision log per dealer, and a list of credit notes due before the GST date.
Weeks 3–6: field visits and signed balances. The reconciled statement is taken to each dealer from the nearest office. You receive: signed balance confirmations, the undisputed amount paid or dated, and any remaining claim with its evidence.
Month 2 onwards: payment of agreed balances. One owner per dealer follows each committed date. You receive: weekly receipts by dealer and territory, and an immediate flash report when a risk appears.
By month 6: every overdue rupee in your bank or classified as at risk or not collectable, the reason evidenced. You receive: a closing file per dealer and a monthly claim-close routine for the future.

What we need from you

Your dealer ledger and the circulars dealers cite are enough for a first view.

To start

Dealer-wise ageing, with the balances currently held
The dealer's statement or claim list, if he has sent one
Scheme circulars for the periods claimed
Your credit-note register for the same periods

To act

Sales records for each scheme period, to compute eligibility
Price-drop, return and expiry policies, with their windows and caps
Delivery copies and transporter receipts for damage claims
Territory managers' notes of any promise outside the circulars
Last signed balance confirmation per dealer
Dealer agreements with credit, scheme and security terms

Missing some of these? Send what you have — telling you what is missing is part of the first reply.

How you stay in control

Every claim decision and every credit note is yours; GGA brings the evidence for each.

Your dealers pay you directly. GGA never receives or holds your money.
Nothing is settled, discounted, written down or taken to legal action without your written approval — including any scheme credit, claim acceptance or credit note.
GGA manages the communication with your customers; escalation steps are discussed with you.
One named GGA owner per dealer; monthly report to your CEO and CFO, a fortnightly review call, and an immediate flash report when a risk appears.
Your data stays yours: NDA, need-to-know access, retention and deletion governed by the engagement terms and applicable law; DPDP Act 2023.
Fees agreed in writing before work starts; six-month term, reviewed with you monthly.
Your commercial team decides each claim; your finance team issues every credit note. GGA proposes values with workings.
Territory managers are consulted on what was promised, and told before any visit in their territory.

Send us one dealer who is holding payment against claims. Email the dealer name, town, balance, the claims he cites and whatever you have from the "To start" list to gg@ggaindia.co.in. Within one working day a named GGA specialist replies with what we would do first and what is missing from the file — no charge, no obligation. For a whole book, ask for a complimentary Receivables Position Review.

A different situation? Foreign company owed money by an Indian business → India Desk · Indian exporter owed by an overseas buyer → Global Receivables Desk

Frequently asked questions

A listed claim can be argued; an unlisted one only grows.

Can a dealer refuse to pay the whole balance because of one open claim?

In practice he often does, though the contract rarely allows it. The fastest answer is not to argue the right but to remove the reason: list and value his claims, credit what is genuine, and ask for the undisputed part now.

What is the time limit for issuing a GST credit note for a dealer scheme or return?

Under section 34(2) of the CGST Act, the credit note must be declared in a return by 30 November after the end of the financial year of the supply, or the annual return date if earlier. For 2025–26 supplies, that is 30 November 2026.

What if the deadline has passed for an old claim?

You can still settle the claim with a financial or commercial credit note, but it will not reduce your output GST. Decide such claims on their commercial merit, with your tax adviser's view on the documentation.

Will GGA accept or reject claims on our behalf?

No. GGA tests each claim and proposes a value with workings. Your commercial team decides; your finance team issues the credit note.

What if the dealer has stopped buying altogether, or we have terminated him?

Reconcile the same way, then follow the route on dealers who stopped buying and paying or recovering dues from a terminated dealer. Seasonal dealers who settle claims only after harvest are covered on dealer pays only at season end.

Sources

Every tax statement above traces to one of these.

This page summarises the position as at 9 November 2026. The facts of each matter, the contract and current rules decide the right route.