Nothing is billed for a Diwali gift, so nothing gets written down. That is the problem. The GST rules ask for a record of every gift and free sample that leaves your stock, and the input tax credit on those goods is blocked. Updated October 2026.
Four lines for anyone who only reads one thing, then why the record matters, how to fill it, who goes in the recipient column and what the workbook does not do. It says plainly that this is a working record kept with your stock accounts, not a replacement for them.
One hundred rows, one for each time goods go out for nothing. Date, item, quantity, where the goods came from, the purchase bill, cost, the GST rate on purchase, the recipient and the credit status. The value given and the input GST on it calculate themselves.
Type each employee's name or code once. The sheet totals their gifts from the register for the financial year, sets the total against the fifty thousand rupee limit, and says who is inside it. A check line tells you when a staff gift on the register matches no name.
Totals by type of recipient and by credit status, with the figure still to reverse picked out. Checks count the rows with no date, no credit status, no input GST figure, a date outside the year or a staff gift with nobody named, so a total is never trusted blind.
A sweet shop's Diwali in eight rows: gift boxes for clients, candle sets and calendars for customers, mithai made in-house for dealers, tasting pieces and three staff gifts. One employee crosses the limit, and the example shows what the register does about it.
Section 17(5)(h), Rule 56(2) and Rule 56(8), sections 35(1), 35(6) and 36, section 7(1)(a), entries 1 and 2 of Schedule I, paragraph A of Circular 92/11/2019 and paragraph 5 of Circular 172/04/2022. Quoted with the practical effect beside each, so you can check this against the source rather than take our word for it.
Petpooja Invoice raises GST-compliant invoices with the tax calculated automatically and tracks stock in real time as you bill, with billing and inventory kept in one place.
Explore Petpooja InvoiceA sale leaves a bill behind it. A gift leaves nothing. Two hundred diya sets go out with festive purchases, forty boxes of dry fruit go to clients, every member of staff takes home a hamper, and by the middle of November the only evidence is a gap in the stock.
The GST rules do not treat that gap as nothing. Rule 56(2) of the CGST Rules says the accounts of stock a registered person maintains shall contain particulars of goods "lost, stolen, destroyed, written off or disposed of by way of gift or free sample". Gifts and free samples are named. A giveaway is a stock movement, and it has to be written down like any other.
And if it is not written down? Section 35(6) says that where a registered person fails to account for goods, the proper officer shall determine the tax payable on the goods not accounted for "as if such goods or services or both had been supplied by such person". Read plainly, stock that has left and appears in no record can be treated as stock you sold. How that applies to your books is a question for your accountant, and the register is what they will ask to see.
The record also has to answer for the credit. Section 17(5)(h) of the CGST Act says input tax credit is not available on goods disposed of by way of gift or free samples. So the GST you paid when you bought those diya sets is a blocked credit, and the register is where you record whether you claimed it, and what was done about it if you had.
Staff gifts carry one more line. The proviso to entry 2 of Schedule I says gifts not exceeding fifty thousand rupees in value in a financial year by an employer to an employee shall not be treated as supply. The year is the trap: a Diwali hamper is counted with whatever that employee was given in April. The Staff Gift Tracker adds it up for each person.
This page is about the record, not the offer. A discount, a slab offer and a buy one get one free are not gifts and do not belong in this register. They go on the invoice, and our Diwali Sale GST Invoice Format covers how each one is billed. For choosing the offer itself, see our guides to Diwali offers that increase sales and festive season retail sales.
Here's a preview of what you'll get inside, sheet by sheet, in the order they open. The figures in the Example row are illustrative.
Where gifts are named. The accounts of stock a registered person maintains shall contain particulars of goods lost, stolen, destroyed, written off or disposed of by way of gift or free sample. The rule excludes a person paying tax under section 10.
Source: CGST Rules 2017, Rule 56(2), read 12-Oct-2026The staff gift limit. Gifts not exceeding fifty thousand rupees in value in a financial year by an employer to an employee shall not be treated as supply. It is counted for each employee across the whole year, not for each festival.
Source: CGST Act 2017, Schedule I, entry 2, proviso, read 12-Oct-2026How long the record is kept. Books of account and other records are retained until seventy-two months from the due date of furnishing the annual return for the year they relate to, and longer where a proceeding is pending.
Source: CGST Act 2017, section 36, read 12-Oct-2026The commonest one. No invoice is raised for a gift, so no record is made at all. Rule 56(2) asks for it all the same. Record the gift on the day it goes out, while somebody still remembers the quantity.
Gift stock is easy to claim along with everything else that month, because nobody knew yet it would be given away. If that happened, mark the row as claimed and still to reverse, and give the total to your accountant before the return.
The fifty thousand rupee limit in Schedule I is for each employee in a financial year. A Diwali gift is added to a birthday gift in June and an award in January. Looking at Diwali alone tells you nothing about who is close to the limit.
Neither is a gift. A discount shown on the invoice reduces the taxable value, and a buy one get one free is two items for one price. Both go on the bill, and putting them in this register would mark credit as blocked when it is not. Our Diwali Sale GST Invoice Format covers them.
A sweet shop that gives away its own mithai bought no finished goods, so there is no purchase bill to point at. The CBIC circular applies the block to the inputs used in relation to gifts and free samples. Record the row, pick "Made in-house", and ask your accountant for the input GST figure.
The register has to show where the stock went. It does not need a list of the people who walked in. For gifts handed over with a purchase, write "Walk-in customers" and the quantity for the day. Keep names for staff, where the limit is counted for each person, and business names for clients and dealers.
Rule 56(8) says entries shall not be erased, effaced or overwritten, and that where records are kept electronically a log of every entry edited or deleted shall be maintained. A spreadsheet keeps no such log by itself. Explain the correction in the Remarks column, and ask your accountant how they want corrections kept.
| Aspect | From memory | With this register |
|---|---|---|
| A gift going out | Handed over, nothing written | One row on the day, with quantity and cost |
| The credit on gift stock | Claimed with the rest of the month's purchases | A status on every row, and one total still to reverse |
| Staff gifts | Looked at festival by festival | Totalled for each employee across the financial year |
| Goods made in-house | Left out, because there is no purchase bill | Recorded, with the accountant's input GST figure |
| At the return | The accountant asks, and nobody is sure | The Summary sheet, with its checks read first |
Swipe the table sideways to see the full comparison.
Download the free Gift Register Format and write down this festive season's gifts and free samples on the day they go out.
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Petpooja Invoice raises GST-compliant invoices with the tax calculated automatically, tracks stock in real time as you bill, and keeps billing and inventory in one place. Ask for a walkthrough of Petpooja Invoice for your shop.
