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Eligibility of ITC Diwali gifts..
Dear member, we purchase dryfruits packet and distribute it to our customers during diwali as a business promotion expense, is it ineligible as per sec 17(5). please suggest..
Replies (8)
ITC not admissible on procurement of Gifts. ITC not available on gifts' when no GST is being paid on their disposal, section 17(5) of the CGST Act, 2017 blocks such credits: AAR
Sir, Supplier also charge gst and we have tax invoice with gst breakup
We can't claim input when the goods are distributed as sample , gift, damage as per 17(5)
A conjoint reading of Section 17(5)(h) of CGST Act, 2017 and Schedule I to CGST Act if the goods are disposed of by way of gift, section 17(5)(h) of
CGST Act, 2017 shall be applicable and accordingly input tax credit in respect of the same shall not be allowed
CGST Act, 2017 shall be applicable and accordingly input tax credit in respect of the same shall not be allowed
As per section 17 (5) we can't claim input tax when we are distributed gift.
The main concept is if you are not paying tax on its disposal then ITC is not allowed be it like, Free Samples, Gifts, Loss of Goods, Fire, Theft etc
If your gift amount More than 50,000 Rs per employee per annum, GST is levied on such supply Without any Consideration under schedule 1 and Paid gst on inward supply of such good can also not be claimed.
ITC on Gifts is specifically BLOCKED under Section 17(5) clause (h) of the CGST Act 2017.
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