GST on Goods/Services given as Free Samle/Gift or as Buy 1 Get 1 Free by CA KAVITA

#cakavita,
#gst on free sample of goods
#GoodsgivenforFree,

The term ‘free supply’ is not defined under GST law, a ‘free supply’ in general
sense, means a supply of goods or services without consideration. Under GST law, the
incidence of tax is ‘supply’. The term ‘supply’ has been defined in an inclusive manner
under Section 7 of the CGST Act. The term ‘supply’ as defined under Section 7 of CGST
Act, 2017, includes all forms of supply such as sale, transfers, exchanges, barters etc.
made or agreed to be made for a consideration in the course or furtherance of
business.
Free Supplies between related /distinct person
Further, clause (c) of Section 7 (1) provides that the activities specified in Schedule I,
made or agreed to be made without a consideration, is a supply under GST. As per
Para 2 to said schedule, supplies between related persons or distinct persons in the
course or furtherance of business even if not for a consideration shall be termed as
supply. As a result, free supplies between unrelated persons are not ‘supplies’,
therefore, not taxable, whereas free supplies between related persons are ‘supplies’
and therefore, such supplies are eligible to GST. In other words, GST shall be levied
on the supplies made even without consideration between distinct or related persons
on such value as determined in accordance with Section 15 of CGST Act, 2017 read
with Valuation Rules under CGST Rules, 2017.

Scope of Para I to Schedule I to Section 7 of CGST Act, 2017
The said schedule also provides under Para 1 that the permanent transfer or disposal
of business asset where input tax credit (hereinafter referred to as ITC) has been
availed on such asset is treated as supply. The term Business Assets has not been
defined under the Act. According to general rule of interpretations, if the language
used has a natural meaning we cannot depart from that meaning unless, reading the
statute as a whole, the context directs us to do so. According to the plain meaning rule,
absent a contrary definition within the statute, words must be given their plain,
ordinary and literal meaning. In the instant case, the term Business Asset is of very
wide connotation. It includes every asset of the business including capital goods,
finished goods etc. The clause stated above includes free supplies between both
related and unrelated person.

[Lucky-xx]

Hello madam...
How to do free sample entry in tally prime when some one buying nothing only take free sample.., ?

[AnkitKumar-ipjd]

Mam if 1 soap cost 100 sell and 1 soap give free means buy1 get1 free, then gst 100 pr lagega. To kya yaha wo ek soap ka itc reverse karega

[SunilSingh-erlo]

Foc k kon invoice bnega tax invoice ya other. Itc liya h or customer ko foc dete h, gst kaise lagega foc pe

[SunilSingh-erlo]

Madam
Goods purchase kiya itc claim krdiya but some items free of cost apne dealer dete h to kya itc reverse kre ya tax pay kre