GST compliance on sales scheme - Taxable item Free quanity

[kiran kumar]

Dear Sir,

We are planning to introduce the new sales scheme for increasing the Sale. If any Buyer purchase 50 kg of Taxable material we are giving 10 kg taxable material for free.

Please advise the following points

1. In invoice how to show the free quantity

2. What is the Gst compliance for free Quantity

Thanks in advance

Regards,

Kiran Kumar

[KASTURI SETHI]

Mr.Kiran Kumar,

Before finalizing marketing strategy, you should go through the following circular, especially, para no.B

Sales Promotion Schemes under GST - Clarification on various doubts

C.B.I. & C. Circular No. 92/11/2019-GST, dated 7-3-2019

 

[Bhavika Chothani]

For goods supplied as free samples only quantity is required to be shown in GST returns. There will not be any taxable value or tax amount in this case. Hence add 10kg in the HSN.

AI Summary

Free supply reporting: quantity of free taxable goods must be shown in GST returns; no taxable value reported.
Free supplies of taxable goods under a sales-promotion scheme must be treated as free supply transactions where the complimentary units are disclosed by quantity in GST returns but are not assigned any taxable value or tax amount; invoices should separately show the free quantity (for example in the HSN/description) to ensure proper return reporting while not computing tax on those units.