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)
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