Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

When we are writing this article, the world is suffering a ridiculously huge dilemma due to the COVID-19 pandemic. Many persons are donating masks, sanitizers, personal protective equipment (PPE), ventilators etc. to the needy people. It is an exceptionally good help to the needy people by giving some essential and required things in this situation.

To encourage these donations the Ministry of Corporate Affairs issued a clarification that the amount spent by companies would be considered under Corporate Social Responsibility (CSR) activities.

Now the question arises that those persons are donating these items to needy people under the obligation of Corporate Social Responsibility, are paying GST at the time of purchase of these goods. So can ITC(Input Tax Credit) be availed on such goods?

ITC on expenditures incurred on public welfare due to COVID-19

Our Analysis

If money is donated in that case there is No GST element therefore no question arises for Input Tax Credit.

If masks, sanitizers, PPEs, Ventilators etc. are donated as Corporate Social Responsibility expenses:

As Per Section 17(5)(h) of CGST Act, 2017, the Input tax credit shall not be available in respect of the goods lost, stolen, destroyed, written off, or disposed of by way of gift or free samples.

These transactions are not covered under goods lost, stolen, destroyed, written off but many peoples have doubts that whether this transaction will cover under gift?

Let us analyze what is the meaning of GIFT.

Gift is not defined under the GST Act. However, Transfer of property act defines, “Gift” is the transfer of certain existing moveable or immoveable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee.  

As per the above definition if any goods transfer voluntarily and without consideration would be treated as a gift. Though, in such cases, goods are transferred without consideration but not voluntarily. It is required under the law, then it should not be covered under the “GIFT.”

In matter of Polycab wires Pvt. Limited, AAR Kerala decided that ITC is not available on any goods used for CSR activities and would be treated as Gift and section 17(5)(h) would be applicable in such case.


As per the above ruling, ITC would not be available on CSR activities but as per our understanding, ITC should be available in such transaction.If masks, sanitizers purchased and used for employees during office hours. 

As per the GST Act, if any goods used for the furtherance of supply then ITC would be available. In such a case, these items use for regular work and as per the direction issued by MHA. Then ITC should be available in such a case.



As per the above discussion, GST should be available on the above transactions but required some positive clarification on availability of ITC in such a situation.

The author can also be reached at cashubham2014@gmail.com


Published by

CA Shubham Kumar
Category GST   Report

2 Likes   4 Shares   2031 Views


Related Articles


Popular Articles

Follow Follow Book Book Book Business Course caclubindia books

CCI Articles

submit article

Stay updated with latest Articles!