Distribution of goods as sample in nepal

Mr. A from Gujarat organised an exhibition in Nepal and distubuted some good as samples. While transfering goods from India to Nepal, Mr. A raised an invoice and paid IGST on the said goods. (As per my opinion, Mr. A will not be eligible to get refund of the same as the goods are distributed as free sample)

what will be the treatment of the transfer of such goods in books of account as well as in GST? Do we require to mention such transfer of goods in GSTR 1? If yes, where to mention such transfer of goods in GSTR 1?

Replies (1)

Free supply are not taxable under GST regime since there is no consideration and therefore it does not fall under the definition of supply. Mr. A shouldn't have paid that IGST. Now the question is he has paid and what is the way out.

Adjust the liability in the next GSTR-3B and also amend the invoice with 0(zero) tax in next GSTR-1. 

Also you are required to reverse the relavant portion of ITC as per section 17(5) read with rule 42/43. 

In books of accounts pass the entry Advt Dr. to Sales.

Making a reconciliation statement is a must to satisfy the officer in future.

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