ITC on Expenses related to Ceremonial occasions

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This discussion clarifies whether Input Tax Credit (ITC) can be claimed on gifts purchased for employees and their families during events like Vigilance Awareness Week. While ITC is generally allowable for gifts related to business activities, such as promoting vigilance, a reversal of ITC is required for gifts specifically given to the family members of employees.

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(Querist)
02 November 2020
We have organized Vigilance Awareness Week and conducted various competitions for Employees and their Family members and we have purchased Gifts for the Winners. Can we avail the ITC of the Gifts purchased?
regards
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
02 November 2020 Creation of vigilance awareness is related to business so ITC can be claimed on such gifts.
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Lekhraj sood

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Lekhraj sood (Expert)
02 November 2020 However, you will have to reverse ITC on the gifts given to family members of employees.
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A K SARMA

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A K SARMA (Querist)
03 November 2020 Dear Sirs,
Thank you very much for clarifying.

regards,
A K Sarma
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