The All India Organisation of Chemist and Druggists (AIOCD) has urged the GST Council to introduce uniform invoice pattern and clarify the process which should be adopted by the trade partners in respect to saleable return as well as leakage, breakage, expiry returns.

The organisation is seeking clarification on the supply of free sample goods offered by the companies. Before the implementation of GST, it was a normal practice in pharma trade, prior to the implementation of GST majority companies are operating free schemes in the form of free goods without charging VAT on it. After introduction of GST, following different methods are adopted by pharma companies like some offering free goods without charging GST on it, some offering free goods charging GST on it, some offering quantity discounts and some charging net rate deduction of Scheme from Price to Retailer (PTR).

AIOCD suggested that the practice of offering free samples should be continued without charging any taxes. JS Shinde, President, AIOCD said, "The previous practice of offering free goods without charging tax on it will avoid the confusion in trade and also make it easy to operate and pass on the scheme to the retailer. For easy compliance of GST and also to comply with Drugs and Cosmetics Act, it is necessary to introduce uniform invoice pattern."

As per section 16 (1) of the CGST Act, every registered person entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used, in the course of furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person.

Section 17(5)(h) of the IGST Act provides that no input tax credit is available if goods lost, stolen, destroyed, written off or disposed off by way of gift or free sample. Hence on combined reading of the above, input tax credit on inputs and services used in free sample should be reserved.