Input credit
This query is : Resolved
Quick Summary
12 January 2021
Hi All
Whether GST input credit is available on business promotion expenses (Gifts purchased for customers)?
Thanks in advance
Whether GST input credit is available on business promotion expenses (Gifts purchased for customers)?
Thanks in advance
12 January 2021
Yes, it's available.
With or without a formal sales promotion scheme in place, bought out goods that are distributed to dealers, customers, etc. can, by no stretch of imagination, be treated as 'gifts' within the meaning of Section 17(5)(h) of the CGST Act, 2017. As we know, under the Indian Contracts Act, 1872, even oral contracts are recognized and are enforceable and what is more important is the concept of 'consensus ad idem'. So long as it is agreed that companies distributing these goods are legally obligated to do so, these goods cannot be treated as 'gifts' at all.
With or without a formal sales promotion scheme in place, bought out goods that are distributed to dealers, customers, etc. can, by no stretch of imagination, be treated as 'gifts' within the meaning of Section 17(5)(h) of the CGST Act, 2017. As we know, under the Indian Contracts Act, 1872, even oral contracts are recognized and are enforceable and what is more important is the concept of 'consensus ad idem'. So long as it is agreed that companies distributing these goods are legally obligated to do so, these goods cannot be treated as 'gifts' at all.
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12 January 2021
It depends on the facts of the case, but generally would be available.
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