India Entry & Business Startup Consultings

Clarification on various doubts related to treatment of sales promotion schemes under GST

The government has provided clarification regarding the extent of tax liability and eligibility of Input Tax Credit on promotional offers such as free samples and buy one get one free schemes. It is made clear that tax would be applicable and ITC would be available for entire package sold including free items.

In case of free samples such as the ones medical representatives of the pharmaceutical companies provide to doctors, they would not be considered as supply and would not attract tax.
For offers such as discount of 10 per cent for a purchase of more than Rs. 1000/- the discounted amount would be excluded to determine the value of supply.
Circular: http://www.cbic.gov.in/resources//htdocs-cbec/gst/circular-cgst-92.pdf;jsessionid=F427E96FB5396468783031785F8FA6E4

 

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