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free supplies GST

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....ree supplies GST<br> Query (Issue) Started By: - Madhavan iyengar Dated:- 5-10-2020 Last Reply Date:- 8-10-2020 Goods and Services Tax - GST<br>Got 3 Replies<br>GST<br>A Company X based in delhi is a distributor of product a manufacturer Y Y supplies Free of Cost product to X X in turn Distributes it free of Cost to its customer Whether any GST implication on X on FOC supply made to its Custome....

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....r( since no ITC is claimed on the FOC material by X so no ITC reversal is required when same material is supplied as FOC to Customer ) X need not discharge any GST also since there is no supply being FOC Reply By Rajagopalan Ranganathan: The Reply: Sir, According to Schedule-I of CGST Act, 2017 the following ACTIVITIES TO BE TREATED AS SUPPLY EVEN IF MADE WITHOUT CONSIDERATION 1.&emsp;Perman....

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....ent transfer or disposal of business assets where input tax credit has been availed on such assets. 2.&emsp;Supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business : Provided that gifts not exceeding fifty thousand rupees in value in a financial year by an employer to an employee shall ....

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....not be treated as supply of goods or services or both. 3.&emsp;Supply of goods - (a)&emsp;by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal; or (b)&emsp;by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal. 4.&emsp;Import of services by a [person] from a related person or from any of his ot....

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....her establishments outside India, in the course or furtherance of business. In your case if X and Y are not related not ax is payable. If they are related then supply of goods even wthout consideration ia liable to gst. Reply By Ganeshan Kalyani: The Reply: Sir, the element of consideration is missing. In my view, there is no gst payable by X when he distributes goods free of cost to its custom....

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....er. At the same time there is no question of reversal of input tax credit as X has not claimed any credit as the goods was received without any consideration. Reply By KASTURI SETHI: The Reply: I agree with Sh.Ganeshan Kalyani Ji. It is a sort of discount and pre-known to the buyer.<br> Discussion Forum - Knowledge Sharing ....