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applicability of GST on promotional products giving free on purchase of Taxable products.
example: pencil is giving free on purchase of pen.
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Applicability of GST on promotional products
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You have to reverse the input tax credit of the item given as freebie.
what account entry should be passed for this in accounts book
No GST is leviable on pencil as the value thereof is 0. Further no need to reverse ITC if pencil is received from the supplier free of cost.
you have to reversed the itc as per sec17(5) which deals with blocked credit
Accounting entry for reversal of ITC
GST ITC Reversal Or Sales promotion Dr. (group in PL)
To ITC
GST ITC Reversal Or Sales promotion Dr. (group in PL)
To ITC
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