GST on Gift Issued and collect back at higher rate

A company issued a gift to customers against and Order for a specified quantity purchase in case of default to purchase the agreed quantity the company bought back at market price which is higher than the actual cost of purchase.

Whether this transaction is treated as sale as per GST and is it necessary to generate invoice for the same towards the customer at inclusive rate?

Please Advise..!!

Replies (2)
Quick Summary
This discussion explores the Goods and Services Tax (GST) implications when a company issues a gift to a customer for a bulk purchase. If the customer fails to meet the purchase agreement, the company buys back the gift at a market price higher than its original cost. The core question is whether this buy-back transaction is considered a sale under GST, and if an invoice is required for the customer at the inclusive rate. The initial advice suggests it falls under GST purview, requiring invoices for both parties upon return, especially if the buy-back price differs.

Yes it will be under purview of GST. In case of return you have to generate an invoice and the opposite party should also issue an invoice for the higher amount

Your query is unclear. Kindly elaborate.

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