Can claim itc on crackers distributed to our customers

This query is : Resolved

Bazeer Ahmed (Querist)
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12 March 2019 Sir / Madam,

We have purchased and distributed crackers at the time of diwali festival to our customers. We do so for maintaining cardial relationship with our customers. Likewise we have also distributed Calendars and diaries to our custtomers on the new year celebration.

Can we treat these transactions as business promotion activities or business auxiliary transactinos and claim ITC on those purchases?

Kindly advise us.

Thanks a lot in advance,

with warm regards,
Bazeer L

CA Anita Bhadra

CA Anita Bhadra (Expert)
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12 March 2019 No , You can not claim ITC
Under Section 17 (5) (h) of CGST Act, 2017 the relevant provision of the said provision specifies that:

Notwithstanding anything contained in sub-section (1) of Section 16 and subsection (1) of Section 18, input credit shall not be available in respect to the following namely:-

“Goods lost, stolen, destroyed, written off or disposed of by way of GIFT or free samples.”

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