Sample goods

 Samples can be bifurcated into two categories

• Type 1 – Marked as samples. Eg.  Pharmaceutical Companies mark certain products as Physicians Samples NOT FOR SALE
• Type 2 – Regular Products which carry MRP and do not carry any declaration that the products are NOT FOR SALE but are issued as samples

In both the categories, the supplier is required to reverse the credit due to specific restriction of credit availability on products issued as free samples. However, with respect to Type 2, since these are not marked as samples but are business assets on which credit was availed at the time of purchase, there is a possibility of these Type 2 samples being treated as Supply under Schedule I and consequently liable to GST (instead of credit reversal). GST will have to be paid based on the sale value of the “same product”.