GST on CSR funds received.

[Vijay Kumar]

Respected experts, One of my client regd under GST under service provider category issued non GST invoice ( without GST) for CSR funds received from a trust. Is there any exemption available for Such funds recd from paying GST ? Trust from whom CSR funds recd is not willing to pay GST. Kindly guide me., I shall be highly thankful.

[DR.MARIAPPAN GOVINDARAJAN]

In my view no exemption is available.

[CAHemanth Kumar]

Dear Sir,

No exemption available.

if GST was not collected, it will be considered as cum- tax basis and need to pay GST.

Further you can inform to trust that if they pay GST, they will be elligible to claim ITC as decided in the case of Essel propack Ltd vs commissioner of CGST, Bhiwandi = ESSEL PROPACK LTD. VERSUS COMMISSIONER OF CGST, BHIWANDI .

[DR.MARIAPPAN GOVINDARAJAN]

The case law cited by our learned Friend relates to the period 2009 to 2010 when the CSR is optional but not mandatory. Companies Act, 2013 makes it mandatory and the Income Tax Act provide that the amount incurred for CSR will not be treated as income and deduction is allowed for such expenditure.

AI Summary

CSR Funds Not Exempt from GST; Must Pay GST on Cum-Tax Basis, Trust Eligible for Input Tax Credit A client registered under GST as a service provider issued a non-GST invoice for CSR funds received from a trust and queried if such funds are exempt from GST. Three responses indicate no exemption is available. If GST was not collected, it should be treated on a cum-tax basis, and GST must be paid. The trust can claim Input Tax Credit (ITC) if they pay GST. The discussion references a case where CSR was optional, but under the Companies Act 2013, CSR is now mandatory, and related expenditures are deductible under the Income Tax Act.