Question 34: We are offering to our distributors if they purchased some particular products, company will give 1 item free if they purchased 3 qty.
In this scenario, we are billing 4 qty and giving discount of 1 product.
For such schemes company printed brochure mentioning that on purchase of 3 products, 1 product is "FREE". Whether it is correct procedure or not' If print brochure like this, company will liable to reverse ITC''

Answer When you are supplying 3+1 at a cost of three. It does not mean that one is given free of cost. Because the price of three includes the price of fourth. Accordingly you can claim ITC on this. The procedure adopted is correct. (reply dt. 05/04/2018)