It is a common practice among certain pharmaceutical companies
to provide drug samples to their stockists, dealers, medical
practitioners, etc. free of cost. So, a medicine strip with a free
medical planner or 20% extra for the same price, would face a levy
on the combined value and in case two products face different rates
of GST, the product with the higher levy would determine tax rate
of the product. The Ministry has now clarified with the Circular
that since "supply" under section 7 of the Central Goods
and Services Tax Act, 2017 includes all forms of supply of goods or
services such as sale, transfer, barter, exchange, licence, rental,
lease or disposal made for a consideration by a person in the
course of furtherance of business and free samples and discounts
are not for consideration, no GST shall be levied on them. However,
this is inapplicable if the activity falls within the ambit of
Schedule I of the said Act.
