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.
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