Tax treatment of sales promotion schemes clarifies supply characterization and Input Tax Credit consequences for promotional offers. Free samples and gifts supplied without consideration are not treated as supply under GST except where Schedule I applies; Input Tax Credit is disallowed for inputs, input services and capital goods used for such distributions unless the activity qualifies as a supply. Buy one get one offers are treated as multiple goods supplied for a single price with tax determined by composite or mixed supply rules and ITC available to the supplier. Known discounts established at or before supply reduce taxable value if valuation conditions are met; secondary post supply discounts do not reduce taxable value under those conditions, though credit notes may be issued commercially.
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Provisions expressly mentioned in the judgment/order text.
Tax treatment of sales promotion schemes clarifies supply characterization and Input Tax Credit consequences for promotional offers.
Free samples and gifts supplied without consideration are not treated as supply under GST except where Schedule I applies; Input Tax Credit is disallowed for inputs, input services and capital goods used for such distributions unless the activity qualifies as a supply. Buy one get one offers are treated as multiple goods supplied for a single price with tax determined by composite or mixed supply rules and ITC available to the supplier. Known discounts established at or before supply reduce taxable value if valuation conditions are met; secondary post supply discounts do not reduce taxable value under those conditions, though credit notes may be issued commercially.
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