GST credit benefit to company on reimbursements
This query is : Resolved
27 January 2025
in our company we have policy for mobile handset purchase for value of 15000 + GST as a fixed value also our company has guidelines that employees should purchase such phones in the name of conpany with its GSTIN no. kindly guide if this policy is correct? also in cases were employee purchases phone for suppose 21000 + GST , will the company gets the gst credit benefit or not??
12 August 2025
Key GST points for credit on mobile handset purchase:
GST credit eligibility on mobile phones (input goods) is generally allowed only if used for business purposes.
If phone is purchased in the company’s name (i.e., invoice issued to company with its GSTIN), GST credit can be claimed on the entire invoice value, provided:
It’s used for business.
The company holds a valid tax invoice.
If employee purchases the phone in their own name, company cannot claim ITC (GST credit).
Reimbursements: If company reimburses employees for purchases done in company’s name (with GSTIN), and the invoice is in company’s name, the company can claim GST credit on the full invoice value, regardless of the policy limit.
Policy limit (₹15,000) is just an internal control/limit for budgeting or approval. But GST credit depends on the actual invoice issued to company with GSTIN.
Your questions:
Is the policy correct?
Asking employees to buy in company name with GSTIN is correct and helps in claiming ITC.
If employee purchases phone for ₹21,000 + GST, can company get ITC?
Yes, provided:
Invoice is in company name with GSTIN.
Company holds the invoice.
The purchase is for business use.
The company can claim ITC on the full ₹21,000 + GST invoice, not limited to ₹15,000.
Recommendation:
Ensure purchase invoices are issued in company name with GSTIN.
Maintain proper documentation for ITC claim.
Policy limit can be reviewed if actual purchases often exceed ₹15,000.
GST credit eligibility on mobile phones (input goods) is generally allowed only if used for business purposes.
If phone is purchased in the company’s name (i.e., invoice issued to company with its GSTIN), GST credit can be claimed on the entire invoice value, provided:
It’s used for business.
The company holds a valid tax invoice.
If employee purchases the phone in their own name, company cannot claim ITC (GST credit).
Reimbursements: If company reimburses employees for purchases done in company’s name (with GSTIN), and the invoice is in company’s name, the company can claim GST credit on the full invoice value, regardless of the policy limit.
Policy limit (₹15,000) is just an internal control/limit for budgeting or approval. But GST credit depends on the actual invoice issued to company with GSTIN.
Your questions:
Is the policy correct?
Asking employees to buy in company name with GSTIN is correct and helps in claiming ITC.
If employee purchases phone for ₹21,000 + GST, can company get ITC?
Yes, provided:
Invoice is in company name with GSTIN.
Company holds the invoice.
The purchase is for business use.
The company can claim ITC on the full ₹21,000 + GST invoice, not limited to ₹15,000.
Recommendation:
Ensure purchase invoices are issued in company name with GSTIN.
Maintain proper documentation for ITC claim.
Policy limit can be reviewed if actual purchases often exceed ₹15,000.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Refund Annexure-B
- Liable to deduct tds and 44ADA
- Sale of Equity shares for Purchase of Residential Property
- Nomination of Bank for refund in itr 2
- Section 56(2) of the Income tax Act 1961 , Gift to relative .
- ECO SUPPLY REPORTIONG IN GSTR-1
- Is Interest applicable for payment made through credit ledger vide DRC03 for FY 2020-21 & 2021-22
- CCFS 2026 Schemed
- Subscription paid to foreign customer
- Two seprate Invoice needed
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
