GST implication on free embroidery services

[SUBHASISH SARKAR]

The company is in the business of importing and selling high end garments . In order to provide specialised services , the company would embross the name of the customer in embroidery on the garment and then supply . In the invoice , apart from billing the value of the product , they would like to separately indicate “embroidery charges” at a value showing 0 (zero) . My query is what would be the gst implications if they disclose in the invoice in this manner .

AI Summary

Exploring GST Implications for Free Embroidery Services: Understanding Supply Without Consideration Under Schedule I of CGST Act. A company in the garment business queries about the GST implications of offering free embroidery services, with 'embroidery charges' listed as zero on invoices. Responses clarify that under the CGST Act, a transaction is typically considered a 'supply' only if there is consideration. However, Schedule I outlines exceptions where activities without consideration, such as free services between related parties or employees, may still be deemed a supply and subject to GST. Therefore, businesses must carefully assess transactions to determine if they fall under these exceptions to avoid unintended GST liabilities.