Gst on non commercial stocks

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 June 2017 HI Everyone

Iam working in an FMCG company, we used to give schemes to the Stockist, that scheme quantity will be supplied to them as Free or Non Commecial stocks, for eg: if they take 7 cases we will give them 2 cases as free, now my question is what is the treatment of such free quantity supplied to them in GST, is there any provision in GST that abolishes the supply of such free quantiy, plz guide me

Regards
Santosh

CA Ronak Doshi

CA Ronak Doshi (Expert)
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12 June 2017 Under GST, when the supplies are made to an unrelated party without consideration (in your case free quanties), such free quantities provided to the Stockiest (assuming unrelated party) does not fall under the definition of supply and hence GST shall not be levied on such supplies.

However, as per Section 17 (5) (h) of the CGST Act, 2017 where goods are lost, stolen, destroyed, written off or disposed of by way of gift or free samples then the input tax credit availed on procurement of such goods needs to be reversed.

Querist : Anonymous

Querist : Anonymous (Querist)

20 June 2017 Thank you so much Ronak Doshi sir