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Free sample distribution

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one medicine Co distribute sanitizer in free of cost which is purchased with gst. how can I show this in tally? what is the entry which is help to reduce the stock? gst is applicable or not on this supply?
Replies (6)

Pass  purchase entry  of   Sanitizer  with  GST   as follows 

1)  Purchase               A/c       Dr 

      CGST                   A/c        Dr 

      SGST                   A/c        Dr 

     To  Sundry  Creditors    A/c               Cr  

(  Purchase of  Sanitizer  , Invoice  No ----  Dated ----) 

 

2)  When pay for above purchase 

     Sundry  Creditors      A/c    Dr 

     To  Bank                    A/c    Cr 

(  payment  made  with  Gst  to supplier )  

 

3)  when  you distribute  Same  Sanitizer  as a  Free  Sample  entry  will be 

     Free  Sample  ( Sanitizer )  A/c    Dr 

     To  Purchase                       A/c     Cr  

(  Being  Sanitizer  Distributed  as free sample )   

Note - No Input Tax  credit  For   Free  Sample  as per section 17(5) (h) of CGST  act  2017 , if  you have  taken  credit  please reverse . Also  refer  circular  no  92/11/2019  dated 7/3/2019  Gst on free Sample 

 

Thank u sir. Is this free sample a/c made under indirect exps a/c?and this free sample distribution enty will be made excluding gst?
Under Direct Expense in Trading A/c and yes excluding GST .

No need to pass separate entry for selling free samples. Pass entry in Stock Journal directly for  reducing the stock.

 

 

 

Supplier has charged GST , so we have pass entry in terms of filing. return .
We bill the materials each with @ Rs. 1 plus tax to customers to have a clear and proper records of inventory and accounting books. It is wrong in anyway ?


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