GST ON BRAND PROMOTION

[SAJAN KUMAR]

We Purchase the Bag , pen and Copy with sticker of xyz (Brand) and distribute to our customer for increase our sales volume. We booked the expense in our book as a sales promotion and take the ITC, So as per you we are libel for take itc or not please give the advice

Mahadev

[KASTURI SETHI]

In my view, ITC is not admissible as it falls under the definition of 'gift' without any contract/agreement. It is hit by Section 17(5)(h) of CGST Act. However, you must read the following circular for future plan or otherwise.

Sales Promotion Schemes under GST - Clarification on various doubts

C.B.I. & C. Circular No. 92/11/2019-GST, dated 7-3-2019

[Ganeshan Kalyani]

Sales promotion may include advertisements, where ITC is allowed. But when an item is given away free then it would cover under section 17 and ITC will be disallowed.

AI Summary

Input tax credit on free promotional giveaways restricted; ITC disallowed for gifts under statutory provision, adverts treated differently
ITC on promotional activities that are advertising expenses may be admissible, but goods given away free without contract qualify as gifts and ITC is disallowed under the statutory provision blocking credit for such items; administrative guidance is referenced for planning promotional schemes.