Export Sales-samples, Goods and Services Tax - GST

[vignesh VSACCOUNTOPRIVATELIMITED]

Sir, export of goods as samples. we will not receive funds for this sample sent! how to show the same in GSTR-1 and for Income tax?

Posts / Replies

[vijay kumar]

You will be required to pay GST and clear such samples, in the wake of Rule 96B of the CGST Rules, 2017. In the GSTR-1, you can show such clearance under Zero rated supply of goods with payment of tax, but don't claim any refund of the tax paid since proceeds will not be received

[Amit Agrawal]

Barring activities specified in Schedule I, for any activity to fall under 'supply' u/s 7, such activity needs to be made or agreed to be made for a consideration by a person in the course or furtherance of business.

Exporting goods as free samples will not fall as 'supply' u/s 7 (presuming exceptions not applying) as there is no consideration to be received there-against. Hence, question of issuance of tax-invoice u/r 46 or disclosures in Form GSTR-1 or liability to pay outward supply does not arise.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Amit Agrawal]

Rule 55 will come into play for 'transportation of goods without issue of invoice' and E-way bill where applicable.

And, u/s 17 (5) (h), input tax credit is not be available in respect of 'goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples'.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Amit Agrawal]

Please read Para 2 of my post at serial number 2 above, as follows:

Exporting goods as free samples will not fall as 'supply' u/s 7 (presuming exceptions not applying) as there is no consideration to be received there-against. Hence, question/s of issuance of tax-invoice u/r 46 or disclosures in Form GSTR-1 or any liability to pay gst as outward supply (just because non-receipt of convertible foreign currency etc. does not arise.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[KASTURI SETHI]

Is sample, de facto, free of charge ? That is worth penetration before 'jumping' at conclusion ?

[Shilpi Jain]

Is this sample a pre-condition for any supply / sale contract? Or is it like a sale promotion tactic? Or is it for fulfilling some regulatory testing requirements?

Further facts required to confirm the tax treatment.