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Eligibility of ITC Diwali gifts..

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55 Points Posted on 22 May 2020
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..
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On 22 May 2020 at 22:40 Report
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Finance/Compliance Consultant
61384 Points Posted on 22 May 2020

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

20 Reply
On 22 May 2020 at 22:49
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55 Points Posted on 22 May 2020
Sir, Supplier also charge gst and we have tax invoice with gst breakup
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On 22 May 2020 at 22:51
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CA-PRACTICE
400 Points Posted on 22 May 2020
We can't claim input when the goods are distributed as sample , gift, damage as per 17(5)
3 Reply
On 22 May 2020 at 23:25
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GST Practitioner
55067 Points Posted on 23 May 2020
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
301 Reply
On 23 May 2020 at 00:04
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7 Points Posted on 23 May 2020
As per section 17 (5) we can't claim input tax when we are distributed gift.
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On 23 May 2020 at 00:16
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Finance/Compliance Consultant
61384 Points Posted on 23 May 2020

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

20 Reply
On 23 May 2020 at 08:07
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602 Points Posted on 23 May 2020
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.
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On 23 May 2020 at 08:15
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Student
23688 Points Posted on 25 May 2020
ITC on Gifts is specifically BLOCKED under Section 17(5) clause (h) of the CGST Act 2017.
97 Reply
On 25 May 2020 at 21:05


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