Here’s why there would be less ‘buy one, get one free’ offers now

If you are wondering what happened to those ‘buy one-get one free offers’, thanks to GST, they are now less in number.

Goods and Services Tax (GST) fine print will tell you that companies will be taxed on the freebies they offer to win customers.

Companies have to pay additional taxes under GST, if they are offering anything free.

"We are doing away with buy-one get-one-free offers and are switching to upfront discounting. This is causing disruption but it's what is required under the goods and services tax," Mayank Shah, marketing head at Parle Products, told ET.

Companies are now evaluating different methods to win over customers and offer discounts.

ET reported Domino's Pizza and Pizza Hut are stopping buy-one-get-one free schemes.

"Under the GST fine print, every product sold in food services has to have a notional value. So, we are doing away with our buy-one-get-one-free offers," Pizza Hut managing director Unnat Varma told ET, adding “We are currently running offers, for example, under which consumers can buy two pizzas and get discounts on the third."

Under the GST, anything that is sold free of cost, its transactional value must be found out and GST paid on it.