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|
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
sales under free sample under GST
sold one laptop with one free headphone under gst
Go to gateway of tally > accounting info > create ledger > tax free supply > under indirect expense > is gst applicable > not applicable >
show below details
- 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
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
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