Gst credit availability of diwali gift purchased 4 employees

The general rule is that you are eligible to take credit of input tax charged on suppply of goods or services which are used in the course or furtherance of business. Purchase of diwali gifts for Employees and Business Associates is certainly not incurred in the course of the business of the company, therefore, in my opinion, you are not eligible to take ITC. However in case of business associates, if you are able to establish that this expense is used in the furtherance of your business, then you can claim ITC.

yes I agree with akash

sir can you help me furtehr on this point. we have our head offfice in Delhi and no other branch but have sales person accross india. we have purchased diwali gifts for our asssociates who are not in Delhi. so we would be sending these gifts to our sales person located outside Delhi who will further dirstribute them

how can we transfer thegifts from Delhi to other sates

is it stock transfer?

is principle agent supply?

should we raise invoice?

what if final product of your business is excempt from GST, would ITC still be available

GST will not be levied on free samples distributed, because it is not considered as supply also, ITC on such purchases are not allowed to supplier.

we are not distributing free samples. we re distributing diwali gifts

It's free of cost na

Section 17 (5) specifically states in point (h) that goods lost, stolen, destroyed, written off or disposed of by way of gift or free sample is not eligible for input tax credit. Thus, according to above provisions of section 17 (5) (h), input tax credit is not available for free sample. If input tax credit has been availed than the taxpayer, then the taxpayer must reverse input tax credit pertaining to goods which are to be disposed of by way of free sample.

yes it is free cost

anyway i am not asking about ITC

i am asking how do we transfer the gifts out of delhi to a place wehere we dont have branch

You can transfer by transport, hand delivery any mode of transport