Sales promotion

because u r distributing goods as free sample for promotion of ur business......

the entry should be if VAT is not applicable on that goods is......

            Busines Promotion/ Advertisement Expenses A/c dr.

                        To Purchase A/c

If VAT is applicable on the goods then Entry will be

              Business Promotion/Advertisement Expenses A/c Dr.

                          To Purchase A/c

                           To Input Vat A/c ( @ which is applicable on the goods)        

Dear Komal,

thanks for the reply. We are registered dealer and vat is applicable. So do we have to sell at actual rate as VAT is applicable or any other adjustments?

Thanks for replying.

Regards,

Santosh B Dasoji

I didn't get ur point sir........

can u explain what do u want to know????

Komal

We are launching a new co & our product is a biochemical which is used for cleaning.

For business promotions We are giving each clients free sample for trial. 

We are giving free sample of 5 ltrs to each client whichs cost Rs.5000/-

Now my question is do I have to book a sale if yes than at what rate? and do I have to charge VAT on this sale as this is for business promotion.

thanks Komal for replying.

Regards,

Santosh B Dasoji

No sir You don't have any need to book any sale, you are distributing your goods as free sample for Business Promotion, you have to record the entries given above by me only.......

according to Vat rules you have to simply reduce your Vat Credit means your Input Vat  and nothing else.........

Santosh ji

in which state

Komal ji

 is there any circulation of vat regarding  free sample that no need to book the sale.

if vat is applicable, we  need to give serial no. of sale inv. & keep record of tax.

Dear Gautam,

We are based in Mumbai.

Cant we pass zero value entry say,

Advertising exp Dr. 0

To Sales 0

This we will pass JV.

Sales tax is not applicable as there is no consideration.

Kindly advice if this is the correct method.

Santosh Sir,

Entry will be:-

  Advertisement/Business Promotion/Free sampling Expenses A/c Dr.

                      To Purchase A/c

                              To Input Vat A/c

( input Vat reduces @ which is applicable on the goods)

For this you can refers the Sec 10(2) of the VAT Act..........

and as I told you before that there no need to pass any sales transaction.  

Dear Komal,

Thanks for the reply, actly we are importing the goods and selling. So you mean to say we have to off set against purchase for free samples

Business Promotions Dr.

To Purchase

Regards,

Santosh

Sorry Sir a bit confusion actually this Sec 10(2) is of DVAT act,

you can check out with MVAT, 

may be the application will remains same...............

means you are not purchasing the goods from a registered VAT dealer???????

No We are purchasing from United States. Imports