*Sample Material*

[Former Member]

In case of Sample material / Free of charge delivery, whether a company mandatory pay 1)Excise, 2) VAT/CST or 3)both while supplying in India and outside India (Export).?

[Lakshmipathi]

Dear Sachin

Be it a normal sales or sample sales, when you remove goods from a manufacturing unit / plant, you are suppose to pay excise duty for all domestic transactions. As for as tax is concerned, it is also exempted for which, you need to give a declaration that the said material is being despatched as a sample to (you have to provide full address and also you have to mention for what purpose you are sending) the customer is free trade sample and no commercial value is involved.

In case of exports, both duty and sales tax will be exempted.

thanks

G. Lakshmipathi

[Former Member]

Dear Friend,

As it is a functional Question ---the Answer varries..

Some of the destination where taxes are not Mandatory for free goods for Social benefits can be taken into consideration.

But in generic scenerio taxes are always leived on the Basisc price of the sample costing .

Whether it is CST or VAt or export but the Basic price can be made free by condition R100 in the pricing procedure.

reward points if useful.

regards,

Amlan Sarkar

[Former Member]

Dear sachin,

Please go through the below link which will be helpful for your understanding ,

In case of sample export : It will be treated as physical export , means , normal export with LC or bank garentee.

saravanan

[Former Member]

Hi...

Incase if sample is billed within india (duty paid ) u need to pay excise as per tariff heading of the material. But u need not to pay tax as this is sample and not sale. For not paying sales tax u have to maintian one text on the invoice " "Free sample - Not for sale- No Commercial value"

If u send the material outside india u need not to pay excise duty ( duty will appear on invoice but under fogone haed.) the good will be cleared under duty forgone with ARE1. No tax is applicable.

Hope this will help u. If yes reward points.

All the best.