ITC ineligible on CSR activities being excluded from normal course of business

Last updated: 24 December 2021

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The Gujarat Authority for Advance Ruling (AAR) has determined that companies cannot claim Input Tax Credit (ITC) on expenses incurred for Corporate Social Responsibility (CSR) activities. The ruling states that CSR activities are not considered part of a company's normal course of business, thus disqualifying them from ITC eligibility under GST law. This decision follows the interpretation that CSR, by its nature, is separate from the core business operations.

Court :
AAR, Gujarat

Brief :
The AAR, Gujarat in the matter of M/S. Adama India Private Limited [Advance Ruling No. GUJ/GAAR/R/44/2021 dated August 11, 2021] held that, no Input Tax Credit (“ITC”) would be available for Corporate Social Responsibility (“CSR”) activities excluded from normal course of business.

Citation :
Advance Ruling No. GUJ/GAAR/R/44/2021 dated August 11, 2021

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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