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Meaning of supply:
- Supply includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease, or disposal made, or agreed to be made for a consideration by a person in the course or furtherance of business
- The activities specified in schedule I , made or agreed to be made without a consideration”
Schedule I Activities treated as supply even without consideration:
- Permanent transfer or disposal of business assets where input tax credit has been availed on such assets
- Supply of goods or services or both between related persons or distinct persons mentions as per section 25,
- Supply of goods:
- by a principle to his agent where the agent undertakes to supply goods on behalf of the principal or,
- by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal.
“The value of supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply”
Input tax credit shall not be available in respect of “Goods lost, stolen, destroyed, written off, or disposal of by way of gift or free samples”
SINCE, FREE SAMPLES ARE DISTRIBUTED WITHOUT CONSIDERATION AND THE RECIPIENT IS NOT EITHER RELATED OR DISTINCT PERSON, THEREFORE FREE SAMPLES SHALL NOT BE CHARGEABLE TO GST,
INPUT TAX CREDIT IN RESPECT OF SUCH FREE SAMPLES SHALL NOT BE AVAILABLE
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