Nothing is going to come for free after GST is implemented. Here’s why
Advertisement
The ‘Buy One, Get One’ offer that lured you to buy most of the products may no longer attract you as the Indian government is thinking of levying Good and Services Tax (GST) on the free product.
Yes, this means your free product will also be taxed.
Under the Section 3 of the proposed GST bill, the government has stated that the supplies specified in Schedule I, made without a consideration, are also liable to GST.
Meanwhile, tax experts have called for some clarity on the same.
"Any form of direct or indirect GST on free supplies could have a significant impact on the sales & marketing spend of companies, specifically those dealing in consumer products," Pratik Jain, national indirect tax leader at PwC, told ET.
Tax experts say the Entry 5 of Schedule I states "supply of goods and/or services by a taxable person to another taxable or non-taxable person in the course or furtherance of business".
"While the GST law clearly lays down that supplies for business promotion without a consideration would be a supply, yet it fails to provide a clarity whether it would be treated as an exempt supply for reversal of credits," Bipin Sapra, partner at EY, told ET.
The Indian government has been doing everything to get the GST bill passed, which will bring state and central taxes with a single GST. However, Congress has opposed the move.
Advertisement
Yes, this means your free product will also be taxed.
Under the Section 3 of the proposed GST bill, the government has stated that the supplies specified in Schedule I, made without a consideration, are also liable to GST.
Meanwhile, tax experts have called for some clarity on the same.
"Any form of direct or indirect GST on free supplies could have a significant impact on the sales & marketing spend of companies, specifically those dealing in consumer products," Pratik Jain, national indirect tax leader at PwC, told ET.
Advertisement
"While the GST law clearly lays down that supplies for business promotion without a consideration would be a supply, yet it fails to provide a clarity whether it would be treated as an exempt supply for reversal of credits," Bipin Sapra, partner at EY, told ET.
The Indian government has been doing everything to get the GST bill passed, which will bring state and central taxes with a single GST. However, Congress has opposed the move.
Advertisement
- Luxury “floating” beach unveiled in France, termed an “ecological aberration”
- Scientists think they’ve spotted 60 potential alien power plants in the Milky Way!
- Bread, butter, milk-based health drinks, cooking oils classified as ultra-processed food, ICMR advises restriction
- Debt, equity holders approve merger of IDFC with IDFC First Bank
- Sunrisers Hyderabad to take on Punjab Kings as they look to grab the second spot in IPL points table
- Nothing Phone (2a) blue edition launched
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market