FREE SAMPLE & REPLACEMENT IN WARRANTY PERIOD

[RAMNIRANJAN KANDOI]

FREE SAMPLE & REPLACEMENT IN WARRANTY PERIOD

GST PAYABLE OR NOT & WHAT RULE / SECTION IN GST

[Himansu Sekhar]

please refer to the id- 112773

[Himansu Sekhar]

also please refer 112450

[Himansu Sekhar]

FAQ: Drugs & Pharmaceuticals

Question 2: What are the requirements for clearance of physician samples distributed free of cost?

Answer: In case of clearance of physician samples distributed free of cost, the ITC availed on the said samples has to be reversed in view of the provisions under Section 17(5)(h) of the CGST Act, 2017.No tax is payable on clearance of physician samples distributed free of cost as the value of supply is zero and no credit has been availed.

[Ganeshan Kalyani]

In case of free sample GST is not applicable on the supply part but proportionate input tax credit need to be reversed.Thanks.

[YAGAY and SUN]

Proportionate ITC needs to be reversed.

[DR.MARIAPPAN GOVINDARAJAN]

Yes, ITC is to b reversed.

AI Summary

Input tax credit reversal required where goods are supplied free as samples or warranty replacements; GST not payable on zero valued supply.
Free samples and warranty replacements are treated as zero valued supplies for GST, so no tax is payable on the outward supply, but any input tax credit claimed in respect of those goods must be proportionately reversed under the ITC reversal mechanism to reflect the free supply.