BUSINESS PROMOTION

[VIBHUKUMAR SANGAL]

We have given a Party for Business Promotion. This party has organised by a event organiser. In which, they organised food, musician, music & dance. They have given us Bill with GST. Can we take GST Input on the same Bill.

[KASTURI SETHI]

Not allowed. It is an uphill task to prove that party was given in the course of business or furtherance of business (taxable). Under Section 155 of CGST Act, the burden of proof is cast upon the person to the effect that ITC was availed correctly. It will be a hard nut to crack.

[DR.MARIAPPAN GOVINDARAJAN]

If it is for the furtherance of business credit can be availed.

[Ganeshan Kalyani]

If the invoice is with the description of service as 'Business Promotion" , then credit is eligible.

[KASTURI SETHI]

Service provider cannot issue invoice with description as "Business promotion". Service provider will mention item - wise and service wise particulars on the invoice . It is a statutory duty of the person who avails ITC to prove that ITC has been utilised in the course of taxable business or furtherance of business. The possibility of misuse cannot be ruled out. The department is very strict in such matters. It is not risk-free.

[Ganeshan Kalyani]

Sir, event organiser may not raise an invoice separately indicating charges for food, musician, music and dance etc. They would be charging a lump amount for arranging party. The head may be "event management charges" or expense toward "promoting business" i.e. business promotion.

[Mahadev R]

It would be subject to litigation for sure if the description contains words such as food, musician, music dance etc. Even the past this has been subject matter of litigation. In GST also one could expect the same. If invoice is for event management services which in turn is for business promotion, ITC should be eligible.

AI Summary

Input tax credit entitlement depends on demonstrable business purpose and clear invoice particulars, or it may face challenge.
Entitlement to input tax credit on a business promotion event depends on proving the expense was in the course or furtherance of business and that ITC was correctly availed; the evidentiary burden under Section 155 of the CGST Act rests with the claimant. Itemised invoices identifying the nature of services support ITC claims, while generic lump sum descriptions increase audit scrutiny, litigation risk, and potential disallowance.