dear sir,
can we avail input Tax credit for the Diwali gifts PURCASE for our labour,we have tax invoice in our firm name and gifts purchase from regular dealer
no itc on diwali gift items
22 Replies
saurabh jain
(manager)
(174 Points)
Replied 28 October 2017
Amit ji, kindly check we have list in pdf downloaded from CaClub india website file for rate of tax under GST on expenses debited to trading ,profit and loss account in which DIWALI/NEW YEAR GIFTS PURCHASED UNDER APPLICABLE RATE IS ELIGIBLE FOR INPUT TAX CREDIT IS YES, KINDLY REPLY SIR.
RAMESH KUMAR SINGLA
(PROFESSIONAL)
(1777 Points)
Replied 28 October 2017
Section 17(5)(h) of CGST Act cleary bars ITC on goods disposed of by way of gifts.
saurabh jain
(manager)
(174 Points)
Replied 30 October 2017
sir, the list for itc available is already posted in CaClub india in serial number 84 in which ITC on Diwali /New Year gifts are mentioned under eligible ITC credit
saurabh jain
(manager)
(174 Points)
Replied 30 October 2017
Sales Promotion/Business Promotion 18% Yes Yes Yes
saurabh jain
(manager)
(174 Points)
Replied 30 October 2017
cost of Diwali gifts to Labour @ 1500/each for 30 worker's =45000 taxable value +gst 8100=53100 total tax invoice received along with firm name and GSTIN number on invoice and also purchased from regular dealer payment made through neft no cash payment
saurabh jain
(manager)
(174 Points)
Replied 30 October 2017
cost of Diwali gifts to Labour @ 1500/each for 30 worker's =45000 taxable value +gst 8100=53100 total tax invoice received along with firm name and GSTIN number on invoice and also purchased from regular dealer payment made through neft no cash payment
saurabh jain
(manager)
(174 Points)
Replied 30 October 2017
cost of Diwali gifts to Labour @ 1500/each for 30 worker's =45000 taxable value +gst 8100=53100 total tax invoice received along with firm name and GSTIN number on invoice and also purchased from regular dealer payment made through neft no cash payment
saurabh jain
(manager)
(174 Points)
Replied 30 October 2017
amit ji now question comes that as per clause (h) of section 17(5) of cgst act 2017 , the input tax credit with respect to goods disposed of by way of gifts shall not be allowed, The definition of goods as per section 2(52) means every kind of movable property........ which are agreed to be served before supply or under a contract of supply. in order to call a commodity as goods, it is necessary that they are used for the purpose of supply. To call a particular transaction as a supply it should have consideration involved or the same should be mentioned under schedule 1of the act. There is neither any consideration nor is there any reference of gifts under schedule 1 except of those given to employees. in such circumstances, these Diwali gifts move out of the ambit of Goods from the perspective of business unit purchasing such gifts. it should be noted that the same Diwali gifts shall be treated as supply of goods for vendor who have sold such gift's as per section 16 what is required is that there should be tax charged on supply of goods by a vendor to tax payer. it nowhere restrict that such items which are purchased should also qualify as goods for the purchaser. therefore it can be construed that Diwali gifts fulfill the consideration of section 16 for claming of input tax credit
saurabh jain
(manager)
(174 Points)
Replied 30 October 2017
conclusion seems that tax paid on gifts of Diwali is eligible but Sweet's given or food and brevergaes given will not considered for itc
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