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Sample goods

SUMIT BADYAL (709 Points)

27 October 2021

hi, can we send goods as a sample with MRP printing on it?

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Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294) (3368 Points)
Replied 27 October 2021

Samples can be bifurcated into two categories

Type 1 – Marked as samples. Eg. Pharmaceutical Companies mark certain products as Physicians Samples NOT FOR SALE
Type 2 – Regular Products which carry MRP and do not carry any declaration that the products are NOT FOR SALE but are issued as samples

In both the categories, the supplier is required to reverse the credit due to specific restriction of credit availability on products issued as free samples. However, with respect to Type 2, since these are not marked as samples but are business assets on which credit was availed at the time of purchase, there is a possibility of these Type 2 samples being treated as Supply under Schedule I and consequently liable to GST (instead of credit reversal). GST will have to be paid based on the sale value of the “same product”.