Treatment of sales promotion schemes under GST clarified; taxability, valuation and ITC consequences for samples, discounts and offers. Free samples and gifts supplied without consideration are not treated as supply and do not attract ITC entitlement for the supplier unless the distribution qualifies as a deemed supply; buy-one-get-one offers are treated as multiple supplies for a single price with tax treatment determined by whether the arrangement is a composite or mixed supply, and suppliers may claim ITC for inputs used in such offers; discounts shown on invoice and pre-established volume discounts may be excluded from taxable value if statutory conditions are met, while secondary post-supply discounts not known at time of supply cannot be excluded though commercial credit notes may be issued.
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Provisions expressly mentioned in the judgment/order text.
Treatment of sales promotion schemes under GST clarified; taxability, valuation and ITC consequences for samples, discounts and offers.
Free samples and gifts supplied without consideration are not treated as supply and do not attract ITC entitlement for the supplier unless the distribution qualifies as a deemed supply; buy-one-get-one offers are treated as multiple supplies for a single price with tax treatment determined by whether the arrangement is a composite or mixed supply, and suppliers may claim ITC for inputs used in such offers; discounts shown on invoice and pre-established volume discounts may be excluded from taxable value if statutory conditions are met, while secondary post-supply discounts not known at time of supply cannot be excluded though commercial credit notes may be issued.
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