ITC ON SALES PROMOTIONAL EXPENSES

There is a trader who sells spare parts. He gives towels as sales promotions when a particualr dealer achives a certain target. can ITC be claimed on towels purchased?

Replies (4)
Quick Summary
A trader selling spare parts provides towels as a sales promotion when dealers meet specific targets. The discussion centres on whether Input Tax Credit (ITC) can be claimed on these promotional towels, which are essentially free gifts. Generally, ITC is not available for such promotional activities, though specific pre-conditions can apply.

Free gift?

yes, free given based on target achieved. 

ITC is not available for this activities.
Input tax credit is available on certain pre conditions

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