13 July 2017
Dear Sir, we are manufacturer of Cosmetics and i want to send some sample to our Party (A.P.) (from Delhi to Gantur (A.P.) ) through VRL Logistics, Now i want to know that what is the procedure for free sample under GST?
25 July 2024
Under GST, sending free samples from Delhi to Guntur for your business purposes involves certain considerations. Here’s how you can handle it:
### Procedure for Sending Free Samples under GST
1. **Definition of Free Sample:** - According to GST laws, samples are goods supplied without consideration (free of cost) for promotion or advertisement of business. They are not intended for any commercial value or resale.
2. **Documentation:** - Prepare a delivery challan mentioning that the goods are being sent as free samples. The delivery challan should include: - Details of the sender (your company) and recipient (Party in Guntur). - Description of goods (name, quantity, value marked as "free sample"). - GSTIN (if applicable) of both sender and recipient. - Reason for sending (free samples for promotional purposes).
3. **Invoice Requirements:** - While the goods are sent as samples, no invoice is required since there is no consideration involved. However, the delivery challan serves as a document to record the movement of goods.
4. **GST Implications:** - Sending free samples does not attract GST because no consideration is involved. GST is applicable only when there is a supply made for consideration (sale).
5. **Transportation:** - Choose a reliable logistics provider like VRL Logistics. Ensure they understand that the goods are samples and are not for sale. Provide them with a copy of the delivery challan for their records.
6. **Recipient's Perspective:** - The recipient in Guntur should acknowledge receipt of the samples. This can be done through a simple receipt or acknowledgment of goods received.
### Points to Remember: - Ensure the samples are clearly marked and documented as "free samples" on the delivery challan. - Maintain records of all transactions and documents related to the sending of samples for compliance purposes. - If there are any doubts or specific requirements, consult with a GST professional or your tax advisor to ensure compliance with GST laws.
Sending free samples under GST is straightforward as long as you correctly document the transaction and ensure there is no consideration involved in the supply. This procedure helps in maintaining transparency and compliance with GST regulations.
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