hi, we sell goods to a distributor and they use some quantity of goods as a sample purpose and end of the month they give details of the sample, in credit note, we can reduce tax liability or not.
same in case of expiry goods do not return to us... destroyed at the distributor end.
the main concern is in credit notes we reduce gst.
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Sample and expiry.
Replies (1)
Summary of Actions
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For Free Samples: Reverse the ITC on the inputs used for those samples. Do not treat them as outward supplies for tax purposes.
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For Expired Goods (Destroyed): Do not issue a credit note for tax adjustment. Instead, treat the destruction as an event that triggers the mandatory reversal of ITC under Section 17(5)(h) and ensure you have clear, documented proof of the destruction for audit purposes.
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