CSR expenditure and input tax credit: GST paid on CSR-related supplies is not admissible as business credit.

Input tax credit is not admissible on GST paid for goods and services used to meet corporate social responsibility obligations, because such expenditure is treated as compliance with a separate statutory duty rather than use in the course or furtherance of business. Applying Section 16(1) of the CGST Act, 2017 alongside the CSR framework under the Companies Act, 2013 and the CSR Rules, the ruling holds that CSR activities fall outside the normal course of business and therefore fail the business-use condition for credit. The result is that GST paid on CSR-related supplies cannot be availed as input tax credit.

---

---

Issues: Whether input tax credit is admissible on GST paid for goods and services used to discharge corporate social responsibility obligations, on the footing that such expenditure is incurred in the course or furtherance of business.

Analysis: The ruling turns on the interaction between the GST entitlement under Section 16(1) of the CGST Act, 2017 and the CSR framework under the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR rules exclude activities undertaken in pursuance of the normal course of business, and the decision treats CSR expenditure as a separate statutory compliance obligation rather than an input used in business operations. On that basis, CSR-related supplies are not regarded as being used in the course or furtherance of business for the purpose of input tax credit.

Conclusion: Input tax credit on GST paid for CSR-related goods and services is not admissible.

Ratio Decidendi: Expenditure incurred to satisfy a statutory CSR obligation, being outside the normal course of business, does not satisfy the condition of use in the course or furtherance of business under Section 16(1) of the CGST Act, 2017.

---