ITC on Food Expenses incurred in connection with business promotional activities

[Vishal Soni]

As per section 17(5)(b)(i) of CGST Act, 2017, ITC is no allowable on supply of Food & Beverages etc., however if any business concern incurs expenses for business promotion in form of gift of dry fruits, which are to be distributed to their clients whether ITC will be available in that case?

[SHIVKUMAR SHARMA]

No, ITC Not available on Item Given as gift.

[ANITA BHADRA]

As per Sec 17(5) of CGST Act - ITC will not be available on -Goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples

[SHIVKUMAR SHARMA]

Also please refer Issue Id: - 113894 of this Forum.

[DR.MARIAPPAN GOVINDARAJAN]

ITC is not eligible.

[Ganeshan Kalyani]

Specifically disallowed in the Act.

AI Summary

Input Tax Credit on gifts disallowed, preventing credit for food and beverage promotional items distributed to clients. The operative legal principle is that input tax credit is not admissible where goods are written off, lost, destroyed or disposed of as gifts or free samples; this specifically covers food and beverages supplied as promotional gifts to clients, so purchasing consumable goods for distribution to customers does not convert such supplies into eligible inputs for credit.