Valuation of free samples: apply valuation rules using Rule four or residuary Rule eleven cost principles.
Free samples distributed as marketing giveaways, gifts or donations are to be valued under the Central Excise Valuation Rules: principally under Rule 4 by reference to the nearest sale price (with adjustments) and, where products are subject to MRP assessment, by taking the deemed MRP value when no normal sale price exists. If no sale price can be identified for non retail intent samples, the residuary Rule 11 applied in the spirit of Rule 8-a cost based approach-is to be adopted. (AI Summary)