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ITC on purchase of Diwali gifts

P. T. (82 Points)

02 November 2018

Can a company avail itc of GST on purchase Diwali gifts for their employees?

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5 Replies

A B Kundu (Professional) (1422 Points)
Replied 02 November 2018

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

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Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 02 November 2018

As per schedule 1, ITC can be claim , if the Gift from employer to Employee not exceeding 50k

raza ahmed (CA FInal) (41 Points)
Replied 02 November 2018

It is not a supply as per para 2 schedule 1 upto Rs. 50000 by employer to employee.so company will not charge gst. But company purchased goods from sweet shop at that company had paid gst it will not be eligible to claim gst as per section 17 of cgst act.

rohit bhatia (Student) (31 Points)
Replied 03 November 2018

For elaborate details https://www.caclubindia.com/articles/details.asp?mod_id=34905

Dhvani Gandhi (Chartered Accountant) (2 Points)
Replied 03 November 2018

We can Claim the ITC of the gifts purchased except sweets and other beverages as per sec 17 of CGST Act, We dont need to pay GST if the value of Gift given by Employer to its Employee does not excees Rs 50000,

because as per Schedule1 it is not considered as Supply.