Reversal of ITC on free samples exported

[Hariharan Sundaram]

Dear experts,

Whether ITC has to be reversed on export of free sample if required how to quantify it ?

AI Summary

Debate on GST Impact: Must Input Tax Credit Be Reversed for Free Export Samples? Section 17(5)(h) Sparks Discussion. A discussion on the Goods and Services Tax (GST) implications of exporting free samples without receiving foreign exchange. The primary query concerns whether Input Tax Credit (ITC) must be reversed in such cases. Experts refer to Section 17(5)(h) of the CGST Act, which suggests ITC reversal is necessary for free samples. However, opinions vary, with some suggesting that samples for trade promotion should not require reversal as they are not gifts. The conversation also touches on the RBI's guidelines for EDF waivers and potential challenges in quantifying the ITC reversal.