Gift to Employees

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This discussion clarifies the treatment of Input Tax Credit (ITC) when providing gifts to employees, specifically a blanket valued at over £1.5 Lacs for Diwali. As gifts to employees exceeding £50,000 are considered a supply under Schedule I, the ITC must be reversed. It's advised to book this expense with GST, as ITC is not available for personal nature expenditures.

Rakesh Sharma

Rakesh Sharma (Querist)
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11 November 2020 Dear Experts, we are giving blanket to employees as Diwali gift and value
of blanket is around 1.5 Lacs. What is treatment of ITC in this case?

Should we reversed the ITC or make self invoice (in which name).

Kindly guide what to do in the above case.

Regards,

Rakesh Sharma

Gokul Sharma

Gokul Sharma (Expert)
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11 November 2020 ITC NOT AVAILABLE FOR PERSONAL NATURE EXPENDITURE.
BOOK WITH GST AS EXPENSE.

Lekhraj sood

Lekhraj sood (Expert)
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13 November 2020 You will have to reverse ITC as this is schedule I transaction between related persons and gift to employee exceeding 50k would be considered supply.

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