GST ON FREE SAMPLE
This query is : Resolved
21 January 2026
What is the treatment of free sample in GST ?? Please suggest
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.
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.
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.
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.
22 January 2026
Thank you sir for your valuable opinion.
22 January 2026
You are welcome.
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