Companies may soon find it less lucrative to lure customers with that 25 percent extra shampoo in a bottle at no additional cost or a one-plus-one-free pack of cookies. If the taxman has his way.
The Central Board of Indirect Taxes and Customs may ask the makers of fast-moving consumer goods to pay tax on free products or extra grammage offered under promotional schemes, a senior official told BloombergQuint requesting anonymity.
Giving a product free leads to loss of revenue for the government, the official said. While no goods and services tax is paid on the freebies, the FMCG company still claims credit for taxes paid on manufacturing inputs, he said.
