Free Samples Invoice under GST

To issue a free sample invoice and waybill under GST:

Invoice:

- Mention "FREE SAMPLE" or "SAMPLE NOT FOR SALE" prominently
- Include the company's name, address, and GSTIN
- Show the product details, quantity, and value (though value will be zero)
- Mention the GST rate and amount (though amount will be zero)
- Include the recipient's name and address

Waybill:

- Generate an e-way bill (EWB) as usual
- Select "Supply meant for free" under "Document Type"
- Enter the invoice details and product information
- Mention the vehicle number and transportation details
- Print or generate the EWB

Note: Though not mandatory, it's recommended to issue an invoice and waybill for free samples to maintain records and transparency.

Issuing a free sample invoice and waybill under the Goods and Services Tax (GST) regime in India involves specific steps and considerations. Here’s how you can do it:

Free Sample Invoice
Create the Invoice:

Invoice Number: Assign a unique invoice number.
Date: Mention the date of issue.
Supplier Details: Include your business name, address, and GSTIN.
Recipient Details: Include the recipient’s name, address, and GSTIN (if applicable).
Descripttion of Goods: Clearly describe the goods being sent as samples.
HSN Code: Include the Harmonized System of Nomenclature (HSN) code of the goods.
Quantity and Unit: Mention the quantity and the unit of measure.
Value of Goods: Enter the value of the goods being sent as samples. This value is usually determined by the cost or market value.
Taxable Value: As the goods are being provided for free, the taxable value should be zero.
Tax Rate: Mention the applicable GST rate.
Tax Amount: The tax amount should be zero since the samples are free.
Total Amount: The total amount should also be zero.
However, you need to pay GST on the value of the goods as per the market value even if they are given for free. Hence, you might need to account for the tax liability in your returns.

Add a Note:

Include a note mentioning that the goods are provided free of charge and are not for resale.
Waybill (E-Way Bill)
Generate E-Way Bill:

Part A:
Invoice Details: Enter the details from the free sample invoice.
Value of Goods: Enter the value of the goods as per the invoice.
GSTIN of Supplier and Recipient: Include both your GSTIN and the recipient’s GSTIN.
Place of Delivery: Mention the place where the goods are being delivered.
HSN Code: Include the HSN code of the goods.
Part B:
Transporter Details: Include details of the transporter if applicable.
Vehicle Number: Mention the vehicle number if goods are being transported by road.
Validity:

The e-way bill will have a validity period based on the distance to be traveled.
Points to Remember:
Tax Liability: Even though the goods are provided as samples and are free of cost, you are liable to pay GST on their market value.
Input Tax Credit (ITC): You can claim ITC on the inputs, capital goods, and services used in the manufacture of the samples.

Free samples are one of the trickier areas in GST because the treatment depends on who you give them to.

For unrelated persons (trade promotions to dealers, doctors, retailers): No GST is charged on the outward supply. But you must reverse ITC on inputs used to make or procure those samples under Rule 42/43 of CGST Rules, this goes in Table 4B of GSTR-3B.

For related persons (distributors classified as related parties under Section 15): GST applies. Schedule I of CGST Act treats supply without consideration to related persons as a taxable supply. You need to raise an invoice at open market value.

On the e-way bill: Required if consignment value exceeds Rs 50,000, even for free samples. Mention "for promotional purposes" in remarks.

Best practice: Maintain a separate stock register for free samples, document each dispatch, and reconcile ITC reversal monthly. This keeps you clean in any scrutiny.

For the full GST compliance setup, Tax Garden handles this for product businesses at taxgarden.in/services.