GST on Business promotion and development expensess

[Asked by Guest]

I am a distributor of Bathroom fittings. this month I organised a dealers meet. I incurred some expenses on purchases of gift items, booked conference hall and lunch, etc.

Can I avail Input Credit on these bills

[YAGAY and SUN]

Input Tax Credit on food expenses may not be eligible u/s 17(5).
 

[Alkesh Jani]

Sir,

I agree with the reply given by our experts and in addition, I would say that ITC taken on gift is required to be reversed.

Thanks

[Ganeshan Kalyani]

Input tax credit on conference is also a matter of discussion. If you have held conference in the state where you have GSTIN then credit is eligible. But if conducted in a State where you are not registered then the tax paid is an expense to you .

Yes as opined by my colleague experts input tax credit on lunch and gift item is not eligible for credit. thanks.

[Ganeshan Kalyani]

Do not take credit at first and there is no need for reversal of input tax credit obviously.

[PAWAN KUMAR]

As per my view, goods or services disposed off as free gift is under exclusion clause 17(5)(h), therefore not eligible for Input tax credit. Food items are also not claimable.

Now about the gst on conf.hall booking, the place of supply will be location where conf. is held. Since place of supply and location of supplier is in same state, It will be intra-state and will be leviable to CGST+SGST. In such circumstances if recipient is registered in the same state of supplier, Input tax credit is available, otherwise it will cost.

[Ganeshan Kalyani]

Yes rightly explained by Sri Pawan Sir.

[YAGAY and SUN]

We do endorse the views of our experts.

AI Summary

Input tax credit eligibility on promotional expenses: gifts and food usually ineligible; venue credit depends on place of supply.
Input tax credit for business promotion expenses is restricted: food and catering expenses at promotional events are generally non-creditable and gifts supplied free require reversal or are ineligible. Conference-hall charges are creditable only when the place of supply and the recipient's registration state coincide; if the event is held in a state where the recipient is not registered, the tax paid cannot be claimed as input tax credit and is an expense.