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GST - Agenda for the second year-II - ITC on capital goods, free samples, transitional credit of cesses


ITC reversal on free samples

Dear Gokul,

At the outset, a wonderful series of articles setting the agenda for the second year of GST. On the issue of free samples, the tax administration is oblivious to the fact that costs incurred for supply of free samples are expensed off and has impacted the P and L Account of the business. When such costs are considered for arriving at the price of finished goods then the businesses have every right to claim the ITC. Unfortunately, the tax administration has no clue how businesses work or they don't care for the consequences. We have transitioned into a new tax regime with an archaic tax administration. The need of the hour is progressive minds at the helm of tax administration who can visualize and frame policies and enact laws which are business friendly so that we do not find regressive provision like section 17(5) of CGST Act.

Best regards,
Santosh Hatwar

santosh hatwar 05/10/2018

 

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