Itc on gifts

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This discussion clarifies whether Input Tax Credit (ITC) can be claimed on gifts provided to dealers based on sales volume. Generally, ITC on gifts is blocked under Section 17(5) of the GST Act, as gifts are considered something given without consideration. However, if the commodities are distributed at a discounted price, meaning some consideration is received, then ITC may be claimable. In such cases, the consideration charged will be taxable, and GST will be recovered from the dealers.

yash

yash (Querist)
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21 February 2020 we are planning to launch a scheme based on sales volume where dealer gets gift based on their sales volume, we are able to take ITC on the gift purchased for particular scheme?

Akash Monwani

Akash Monwani (Expert)
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22 February 2020 ITC is blocked on Gifts under Section 17(5) . Hence you cannot Claim input on Gifts distributed
Meaning of Gift A 'gift' is a Something which is given without any Consideration .
But if you distribute the commodities on discounted prices i.e. receive any consideration than you can avail ITC on Gifts
Not the consideration charged will be taxable and GST will be recovered from dealers

Akash Monwani

Akash Monwani (Expert)
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22 February 2020 ITC is blocked on Gifts under Section 17(5) . Hence you cannot Claim input on Gifts distributed
Meaning of Gift A 'gift' is a Something which is given without any Consideration .
But if you distribute the commodities on discounted prices i.e. receive any consideration than you can avail ITC on Gifts
Note: the consideration charged will be taxable and GST will be recovered from dealers

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