A mobile handset has been purchased by the company in order to gift it to one of its clients for business promotion purpose. There is a proper invoice from the GST registered dealer supplier. But is ITC eligible to be claimed on this ? Please clarify .
4 Replies
prasad Nilugal
( GST Practitioner & Accounts )
(14805 Points)
Replied 16 January 2023
No , You Can not claim input tax credit because Gift is blocked credit as per section 17(5)(H) of the CGST Act 2017 .
CS Advocate Abhishek Goyal
(M Com FCS LLB M-AIMA )
(13709 Points)
Replied 16 January 2023
ITC has been expressly denied on items disposed off as gift. However it is a debatable issue since it is only for business promotion which forms part of in the course of or in furtherance of business. But the irony is that the GST law has not distinguished such transactions and there is no ruling available in favor so far.
ADHIP KUMAR MISRA
(ACCOUNTS MANAGER)
(176 Points)
Replied 16 January 2023
Ok thanks for the replies.
Sneha Latha
(Senior Assistant)
(218 Points)
Replied 17 January 2023
According to Circular no. 92/11/2019 - GST, ITC on Business promotion expenses is not eligible under section 17(5)(h) of CGST Act, 2017.
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