VAT on Free products, VAT + CST

[JOHN SHANNEL]

When our distributor buys 100 pkts of snacks we give 2 packets free. I want to confirm whether there is VAT payable for the 2 pkts sold. Also please tell in which section it applies.

 

John Shannel

Posts / Replies

[CA Rachit Agarwal]

Vat is levied on sale of goods.

No doubt that when the goods are sold, valuation rules do apply.

However sales price of 100 packets to include the sales price of 2 packets sold free. Hence in our opinion no vat would be levied on free goods

[R K Rajwanshi]

In my opinion It's total depend on described  the scheme and provision of state laws. in proper  planed manner  extra burden of vat may be avoid.