reproduced below:-
66. Whether expenditure on free offers (with products)
such as freebies like tattoos, cricket cards or similar
products, to trade or consumers (excluding ... artwork or for payment of royalty charges in respect of
such freebies is liable to FBT?
Ans. Any expenditure (including expenditure on artwork
and royalty
which was in the nature of freebies/monetary
grant for promoting its products. According to the Ld. PCIT, this
business promotion expense was required ... considered the CBDT Circular dated 01.08.2012 regarding
disallowance of freebies to medical practitioners and their
professional associates by pharmaceutical and allied health
sector industries
disallow expenditure
incurred by pharmaceutical companies inter-alia in providing 'freebies'
to doctors in violation of the MCI Regulations. The term "freebies ... expenditure so incurred by assessee does not amount to
provision of 'freebies' to medical practitioners. The expenditure
incurred
dated
1 August 2012 has directed to treat the benefit/freebies enjoyed by the
medical practitioner to be treated as income from other sources ... primary onus cast upon him.
There is no dispute that the gifts, freebies and any other benefit to the doctors are
prohibited as per explanation
prescription can be manipulated and driven by the motive to avail the freebies
offered to them by pharmaceutical companies, ranging from gifts such as gold ... international trips. The Bench further held as
"These freebies are technically not 'free' - the cost of supplying such freebies
is usually factored
were they
incurred for providing gifts, travel facilities and
hospitalities Le. "Freebies" to them which were prohibited
by "Regulations ... relation to
doctors and medical professionals which could be
considered as "Freebies".
2. It is humbly prayed that the reliefs as prayed
issue of tax-deductibility of freebies
etc to medical practitioners, and notwithstanding the amendment made in the related tax law
provision by the Finance ... remunerated, and, in that sense, payment of referral fees is not a freebie. There is no merit in.
this argument either. The doctor is being
considered by the Ld. AO as "Freebies to Doctors" in view of Circular
No.5/2012 [F.No.225/142/2012 ... disallow expenditure incurred
by pharmaceutical companies inter-alia in providing 'freebies' to doctors
in violation of the MCI Regulations. The term "freebies
piece shown in sales 790 pieces were given us from freebies. However, the said
explanation was not accepted to the AO as the assessee ... able to prove that
the items were given as freebies and held that the 790 pieces were actually sold and
income of which
after making
disallowances of Rs.6,82,388/- towards freebies and Rs.12,72,710/- relating to
hiring and earth-filling expenses ... vide order dated 17.11.2025
sustained penalty levied on freebies and deleted the penalty levied on
disallowance
