Transfer Disposed off
This query is : Resolved
04 March 2025
Taxable goods send to registered non related person as free sample.
My Question below
Is treated as supply?
Is required to show in GSTR- 1
My Question below
Is treated as supply?
Is required to show in GSTR- 1
12 August 2025
✅ 1. Is it treated as "Supply" under GST?
✅ Yes, this is treated as a supply, even though no payment is involved.
Reason:
Under Section 7(1)(c) of the CGST Act, Schedule I treats "Supply of goods or services without consideration" as supply if it meets certain conditions.
However, sending free samples to a non-related, registered person does not fall under Schedule I, so technically it's not a "deemed supply" under law.
But here's the important twist:
As per Section 17(5)(h), input tax credit (ITC is blocked) on goods disposed of by way of gift or free samples.
Despite not being a supply under Schedule I, most taxpayers voluntarily report such dispatches to maintain inventory reconciliation and compliance visibility.
❗ So legally:
It is not a taxable supply, as there is no consideration, and recipient is not a related party.
No GST is payable.
But ITC on such goods is not allowed.
✅ 2. Is it required to show in GSTR-1?
✳️ Not mandatory to show in GSTR-1 as outward taxable supply, because:
No GST is being charged.
It’s not a supply under Section 7 read with Schedule I.
But you can show it optionally in Table 9B (for credit/debit notes) or as a nil-rated/exempted note in Table 8 (Nil-rated/exempt/non-GST supplies) if you wish to declare for record-keeping.
📝 Final Summary:
Question Answer
Is it treated as "supply"? ❌ No, if no consideration and not to related person
Is GST payable? ❌ No
Is ITC allowed on goods sent as sample? 🚫 No (blocked under Section 17(5)(h))
Report in GSTR-1? ❌ Not mandatory, but optional under Table 8 (non-taxable supplies)
✅ Yes, this is treated as a supply, even though no payment is involved.
Reason:
Under Section 7(1)(c) of the CGST Act, Schedule I treats "Supply of goods or services without consideration" as supply if it meets certain conditions.
However, sending free samples to a non-related, registered person does not fall under Schedule I, so technically it's not a "deemed supply" under law.
But here's the important twist:
As per Section 17(5)(h), input tax credit (ITC is blocked) on goods disposed of by way of gift or free samples.
Despite not being a supply under Schedule I, most taxpayers voluntarily report such dispatches to maintain inventory reconciliation and compliance visibility.
❗ So legally:
It is not a taxable supply, as there is no consideration, and recipient is not a related party.
No GST is payable.
But ITC on such goods is not allowed.
✅ 2. Is it required to show in GSTR-1?
✳️ Not mandatory to show in GSTR-1 as outward taxable supply, because:
No GST is being charged.
It’s not a supply under Section 7 read with Schedule I.
But you can show it optionally in Table 9B (for credit/debit notes) or as a nil-rated/exempted note in Table 8 (Nil-rated/exempt/non-GST supplies) if you wish to declare for record-keeping.
📝 Final Summary:
Question Answer
Is it treated as "supply"? ❌ No, if no consideration and not to related person
Is GST payable? ❌ No
Is ITC allowed on goods sent as sample? 🚫 No (blocked under Section 17(5)(h))
Report in GSTR-1? ❌ Not mandatory, but optional under Table 8 (non-taxable supplies)
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Refund Annexure-B
- House Property Reporting in ITR
- TDS Claim year
- Liable to deduct tds and 44ADA
- Nomination of Bank for refund in itr 2
- Section 56(2) of the Income tax Act 1961 , Gift to relative .
- Rent lease agreement
- Refund of 20%pre-deposit paid for stay application
- TDS Challan Code
- CCFS 2026 Schemed
- Internship/Academic shown in Salary Pay Slip of a Doctor
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
