Free of cost product treatment in GST

This query is : Resolved

sneha (Querist)
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16 June 2018 Respected all, If we want to give the product at free of cost but we are billing the same at 1 RS then whether we have to reverse the credit taken on such product??

RAJA P M

RAJA P M (Expert)
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16 June 2018 Yes... Definitely You will reverse the ITC...

sneha

sneha (Querist)
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16 June 2018 what is the solution of the same while preparing invoice??

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RAJA P M

RAJA P M (Expert)
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16 June 2018 Show the Detail like Free or Sample in Your invoice...

sneha

sneha (Querist)
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16 June 2018 if I will show it as free sample then it will be deducted from qty and no charges should b collected for same?? no GST to b charged??

RAJA P M

RAJA P M (Expert)
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16 June 2018 it will be deducted from qty - YES...
and
no charges should b collected for same?? - YES...

no GST to b charged?? - YES... If You will charge GST for the supply then it's not FREE OF COST SUPPLY.

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Vishakha Kejriwal.

Vishakha Kejriwal. (Expert)
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18 June 2018 Free samples are part of business assets and in case you have availed ITC on such samples it is very much a supply as per Schedule I of the CGST Act and liable to GST even if without consideration..