GST ON FREE SAMPLE

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Query on GST treatment of free samples. Expert clarified that genuine free samples are not taxable supply, but ITC on inputs used must be reversed under Section 17(5)(h). However, BOGO offers are taxable on full value, and discounts are taxed on net value without ITC reversal.

Sunil Patnaik

Sunil Patnaik (Querist)

21 January 2026 What is the treatment of free sample in GST ?? Please suggest

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

22 January 2026 For standard free samples given to unrelated potential customers (e.g., physician samples, FMCG trial packs):
No GST Liability: These are not considered a "supply" because they are distributed without consideration.
ITC Reversal Required: Under Section 17(5)(h), input tax credit (ITC) on inputs, input services, or capital goods used to manufacture or procure these samples must be reversed.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

22 January 2026 Different rules apply if the "free" item is part of a bundle:
Buy One Get One (BOGO): This is not treated as a free sample. It is considered a combined supply of two items for a single price.
Action: Charge GST on the total invoice value. No ITC reversal is required for the "free" unit.
Buy More Save More: These are treated as trade discounts. GST is paid on the net discounted value, and no ITC reversal is needed.

Sunil Patnaik

Sunil Patnaik (Querist)

22 January 2026 Thank you sir for your valuable opinion.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

22 January 2026 You are welcome.

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