Goods cleared as sample for R& D purpose

[Anil Gagneja]

Dear Sir,

 

We have  R & D plant in different location and planning to clear some  raw material as sample after debiting the equivalent cenvat credit taken.

Kindly confirm is their any liability of Central Sales Tax/ VAT on the said raw material.

With regards

Anil Gagneja

AI Summary

Company Plans to Clear Free Samples; No CST/VAT Liability, But Reverse Input Tax Credit Required Per Section Rules A company with an R&D plant in a different location plans to clear raw material samples after debiting equivalent CENVAT credit. The query is whether there's any Central Sales Tax (CST) or VAT liability on these samples. One response clarifies that since the samples are removed free of cost, there is no CST/VAT liability, but Input Tax Credit must be reversed. Another response states that even if samples are sent to a group company as free samples, they must be cleared on payment of duty.