Free Samples (Not For Sales)

Hi,

Appreciate if anybody can advise on below.

1.The samples ruling stated that we do not need to account for output tax for Samples giving free to customers, can we claim the input tax for the samples that we purchased for distributing free to our customers?

2. Do we need to capture GAF File (GST Audit File) transactions for Samples issue out to customers? if yes, what is the tax code to be used?

Thanks a lot.

1.The samples ruling stated that we do not need to account for output tax for Samples giving free to customers, can we claim the input tax for the samples that we purchased for distributing free to our customers?
Yes, we can claim the input tax.

2. Do we need to capture GAF File (GST Audit File) transactions for Samples issue out to customers? if yes, what is the tax code to be used?
Yes, use OS.

Hi Joseph,

Thanks for the reply.

For "L" records of GAF file, is it compulsory to provide complete Company chart of accounts with opening balance and each transactions of the accounts and closing balance for the required period? even though for balance sheet items that is nothing to do with GST?

Thank you.

Yes, every accounting transactions and every details of your accounting entries are captured in the GAF file.

With their computerised systems, Customs is able to extract your TB, BS, PL and every notes to the accounts.

1. Our Company always doing promotion like Buy 5 items & free 1 items (5+1 offer),
So, under this situation, do we need to account for output tax for the foc item to customer??

What is the tax code for FOC items under promotion??

2. Sometimes we will give our products as sample to customers, for the sample we give to customers, do we need to account for out tax??

For the sample we given to customers, can I just write off from system or I need to issue tax invoice to customer? What's the tax code for sample given to customer??

3. How about the product we use as Demo, can we just write off from our system? What's the tax code for Demo item?

1. What is the tax code for FOC items under promotion??
Use the same tax code as when the product is sold for consideration. Example, if you give rice free, use "ZRL" and if you give spaghetti free, use "SR" (spaghetti is a standard-rated item).

2. Sometimes we will give our products as sample to customers, for the sample we give to customers, do we need to account for output tax??
Free commercial sample is not subject to GST.

For the sample we given to customers, can I just write off from system or I need to issue tax invoice to customer? What's the tax code for sample given to customer??
Write them off and use the tax code "OS".

3. How about the product we use as Demo, can we just write off from our system? What's the tax code for Demo item?
Write them off and use the tax code "OS".

Hi

If it is not a commercial sample but a product (stock) given away to customers as demo set before the customers place order, is it fall under Gift Rule just because it is not a commercial sample (not for sale)?

Thank you.

Para 5 (2)(b) of the First Schedule of the GST Act 2014 on "Transfer or Disposal of Business Assets" stated very clearly the commercial sample must be in a form not ordinarily available for sale to the public, otherwise Gift Rule applies.