Credit on CSR activity involving goods and services

[Asked by Guest]

Hi all

I feel this is of interest to all of you

There are divergent opinion on Credit on goods used in CSR activity and also services used in CSR activity. As service is not covered under Sec 17(5).

Also in Service tax there is one favorable judgment on the issue but in the service tax the specific exclusion like section 17(5) in GST was not there.

Pl clarify whether credit can be taken on CSR activity on goods as well services.

AI Summary

Input Tax Credit on CSR expenditures faces uncertainty due to statutory exclusions and conflicting rulings.
Whether input tax credit is claimable on goods and services used for corporate social responsibility activities is disputed under GST because Section 17(5) disallows credit where goods are disposed by way of gift, while services are not explicitly excluded. Conflicting AARs and prior service tax precedents add divergence. Practical effects include possible reversal of credit for gifted goods and GST consequences under Schedule I for permanent transfers, though contributions made pursuant to statutory obligations may not be treated as gifts for reversal purposes.