ITC eligibility on Sales promotion

[suresh sathyamurthy]

Dear Expert

kindly clarify on below two points

a) Along with garments box packing, perfumes or watch etc is packed and given as sales promotion item, billed only for garments, perfume or watch is not charged in invoice since it is sales promotion item, can ITC be claimed for perfumes or watches since the price of the sales promotion is added in the price of the garments. (please provide circular or notification or AAR)

b) Mannequins or display items are purchased and sent to the franchisees to enable the franchisee to display our products, while sending those items we have billed the franchisees at a nominal price of ₹ 1 can the ITC be claimed for the corresponding purchase.

please clarify on the above two points

AI Summary

Clarification on ITC Eligibility for Sales Promotion Items and Mannequins Under GST; Experts Affirm Eligibility An individual sought clarification on the eligibility of Input Tax Credit (ITC) under GST for sales promotion items such as perfumes or watches included with garments, and for mannequins sent to franchisees at a nominal price. Experts responded affirmatively, citing a specific circular for guidance on the first query, and confirming ITC eligibility for both scenarios. One expert suggested adding the value of free goods to invoices and providing discounts to ensure compliance, referencing a recent advance ruling. The individual expressed gratitude for the advice received.