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Tally Free samples and buy one get one free in Tally under GST
free sample under GST tally regime

Tally Free samples and buy one get one free in Tally under GST

Tally Free samples and buy one get one free in Tally under GST

There are several schemes such as buy one get one free, free sample, flat discount etc.These schemes are introduced to increase the sales and to penetrate into a new market.It is very common practice in pharmaceutical business and during the time of festivals.

The treatment of tax for free samples and supplies made to the customer under GST  is very s similar to VAT regime earlier. Under GST regime, anything supplied as ’Free’, the tax will not be levied on such supplies. Nevertheless, on doing so, businesses need to sacrifice the benefit of input tax credit. This means, businesses will not be entitled to input tax credit on the goods, which are supplied as ’Free,’ and proportionate ITC needs to be reversed.

Understand the above the above by example

Product Units Price Price before GST CGST 14% SGST 14% Amount
Laptop Dell 10 25,000 250000 35,000 35,000 3,20,000
Headphone 10 1,500 15,000 2,100 2,100 17,100

In the above case, the offer is sold  laptop with headphone free

As discussed earlier, on free supplies, GST will not be levied. As a result, on making outward supplies of headphone as free, GST will not be charged. However, the company needs to reverse the ITC claim of Rs 210 on the inward supply of.

Similar process needs to be done in the event of goods are stolen, destroyed, written-off or disposed of as gifts,
When purchase is made from supplier under GST

free-supply-under-gst-regime

sales under free sample under GST

sold one laptop with one free headphone under gst

sales under free sample

 

 

After sales

Go to gateway of tally > accounting info > create ledger > tax free supply > under indirect expense > is gst applicable > not applicable >

show below details

tax free supply under gst ledger

  • go to the gateway of tally > accounting voucher > press f7  (journal )
  • Press Alt + J
  • select type of duties and taxes = GST
  • Nature of adjustment  = reversal if input tax credit
  • Additional detail: not applicable

stat ajustment under gst free sample

 

Now in the accounting voucher, F7 journal Debit Tax-free sample account with the amount of GST paid in the above case GST paid is  420 which is 28% of 1500 cost of one headphone purchased. similarly credit CGST with `210 and IGSt 210

jouranl adjustment reversal under free sample gst

ITC Reversal under free sample can be seen under GSTR 2

Go to gateway of tally >display >statutory report >GSTR 2 and you will find ITC reversal

ITC reversal under GST

 

 

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