ITC on Goods distributed as free sample

This query is : Resolved

Suraj (Querist)
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16 September 2021
Dear Sir / Madam,

Mr A started new venture of dealing in Tshirts. He purchased 150 t-shirts. The seller showed the entry in his GSTR1 against GSTN of Mr. A.

On the occasion of 15th August, Mr A printed his material on T-shirts. He distributed around 135 shirts as free samples as advertisement of his business. He was able to sell 5 T-shirts. 3 T-shirts got damaged and 7 remained in hand.

Now my queries are as follows:
1) Can Mr A claim ITC on the 135 T-shirts distributed as free samples? If No, how to show this ITC in GST return??

2) Can he claim ITC on 3 damaged T-shirts? If No, how to show this ITC in GST return??

Kindly guide me,

Regards,
Suraj

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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16 September 2021 1 yes, ITC can be claimed treating it as advertisment expenses.
2 No, don't claim ITC in GSTR 3b.

Message likes : 1 times

Suraj

Suraj (Querist)
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17 September 2021 Thank you R Seetharaman Sir.

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