Amit Mohan Pandey
(Practising chartered accountant)
(371 Points)
Replied 02 October 2017
Shyamal
(Student)
(25 Points)
Replied 02 October 2017
ishika
(CA)
(287 Points)
Replied 03 October 2017
So, yes, its correct for him to charge GST even on freebies. "As per the GST Act, every time something is sold free of cost, its ‘transactional value’ must be found out and GST paid on it."
For your more doubt and problems related to GST, you can visit GSTForumindia.in and ask your question freely.
Amit Mohan Pandey
(Practising chartered accountant)
(371 Points)
Replied 04 October 2017
Free Promotional Item with Taxable Product:
If free promotional item is provided with the taxable product than the consideration for the same will be value charged from the consumer. For the purpose of input tax credit on the promotional item, there is no restriction in the law. Hence, input tax credit on Promotional item along with taxable product is available.
Also in the GST Tweet, It is mention in the Q.55 that in case of promotional item given free to end consumer, than tax will be charged on the total consideration charged for such supply. It can be understand with the following example:
Q.1. Mr. A supplied a mobile phone along with free data card for Rs. 18,000. Cost of the data card is Rs. 1,800.
Price of the mobile phone in open market is Rs. 17,500.
Price of the mobile phone in open market is unknown.
A.1. (i) In first case value of supply will be Rs 18,000.
(ii) In second case Price of the phone will be same as Rs. 18,000.
Q.2. Mr. A Selling a set of Soap which provides offer of Buy 1 Get 1 free. Consideration charged for the soap is Rs. 30. What will be the taxable value? A.2. In this case taxable value should be Rs. 30 as consideration charged from the consumer.
Read more at: https://www.caclubindia.com/articles/free-samples-promotional-items-under-gst-with-examples-30440.asp
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