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ITC ON GIFTS UNDER GST

satish Motipalli (Student CA Final ) (119 Points)

18 January 2019

Dear All,

is ITC on gifts given to distributers is available as per GST provisions.

Thank you in advance.

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8 Replies

prasad Nilugal (3914 Points)
Replied 18 January 2019

No , ITC not available on Gifts given as per section 17(5) (h) of the CGST act 2017 .

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satish Motipalli (Student CA Final ) (119 Points)
Replied 18 January 2019

if they falls under related party definition. even at that time also we can't claim ITC ?

Puja Sharma (CA) (433 Points)
Replied 18 January 2019

ITC will be allowed in case gift is given to distributors in course of furtherance if business.

A taxpayer shall be eligible to claim input tax credit on the gifts purchased by it and distributed to persons related to business but there shall be no ITC with respect to the eatables purchased for distribution to workers/employees or any gifts distributed to the employees by the employer.

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 18 January 2019

Actually as per section 7 CGST Act the supply includes word "Consideration" & As per definition of Consideration it includes Inducement which means to give person something to person & h

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 18 January 2019

Inducement means to To give person something to do something in Return & Gift as per section 2(xii) Gift Tax Act , gift is gratuity & act of generosity so does not involve any consideration. Hence if such gift given to distributor to boost the sale shall not be reversed u/s 17(5)