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Free of Cost Sample Goods Invoice Value

Deepshikha Sharma (Tax Manager) (137 Points)

02 November 2020

Can we issue a Zero value invoice in case of free sample sales to Customer. Customer will not pay anything, directly or indirectly, to us for such free samples sold. We mention the value of such goods as Zero (transaction value paid or payable by buyer) and subsequently the GST on such invoice is zero and total value is also zero. and mention the same under GSTR-1.

is this a correct practice.

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7 Replies

Sanjiv Rajpoot (3430 Points)
Replied 02 November 2020

No this is not correct

JATINDER KUMAR (Accountant) (3662 Points)
Replied 02 November 2020

Yes, you can

pankaj (Chartered Accountant) (106 Points)
Replied 02 November 2020

Sec 17(5)
You need to reverse the ITC if you availed.

if goods is manufactured by you then reverse the proportionate ITC for that month.

1 Like

Deepshikha Sharma (Tax Manager) (137 Points)
Replied 03 November 2020

Yes we reverse the ITC of the same. My concern was that we issue Zero value invoice so if there is anything incorrect in that.

Section 15 says value for unrelated parties would be amount paid or payable by buyer so since nothing is paid by the buyer, he value will be zero for such invoice. This is my understanding.

ayusmita (Tax consultant) (5885 Points)
Replied 03 November 2020

You can issue invoice for free sample
but you should maintain the serial number

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Pankaj Rawat (GST Practitioner) (55030 Points)
Replied 04 November 2020

Yes when the Recepeint is not related or distinct person & there is no consideration is involved , so it' cannot be cover under supply in term of Section 7 of CGST Act.

Can issue nil amount bill.

Note : Make sure if any ITC availed need to be reversed in term Section 17(5).

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