When it comes to the applicability of GST on free samples and supplies, there is a lot of confusion among business owners and start-up founders in India. Many people believe that GST is not applicable on free samples and supplies, while others are of the opinion that it is. In this article, we will discuss the applicability of GST on free samples and supplies in detail.
Free samples and supplies are products or goods that are given away for free by businesses to promote their products or services. It is a common practice among businesses to offer free samples and supplies to potential customers to create brand awareness and to encourage them to try their products.
According to the GST law, any supply of goods or services made for a consideration is taxable under GST. However, when it comes to free samples and supplies, the issue becomes a bit more complicated.
As per the GST law, any supply made without consideration is not taxable under GST. This means that if a business gives away free samples and supplies without any consideration, GST will not be applicable on it.
However, there are certain situations where GST is applicable on free samples and supplies. Let's take a look at these situations:
In conclusion, the applicability of GST on free samples and supplies depends on the situation in which they are being supplied. If a business is giving away free samples and supplies without any consideration, then GST will not be applicable on it. However, if the free samples and supplies are being supplied to related parties, as a part of a promotion, or are branded goods, then GST will be applicable on them.
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