ITC on promotional expenses

[Ashish Diwedi]

Whether GST is applicable on Gold coins / Watches given to business associates as a promotional expense during Diwali?

Can ITC be claimed of GST charged on Gold Coins / Watches?

[Shilpi Jain]

If not in the nature of gifts I.e. if it can shown to be an obligation to give such items, ITC can be claimed. Nothing is free in business.

[KASTURI SETHI]

(i) Yes. GST is payable on such promotional expenses.

(ii) Regarding availment of ITC on such promotional expenses, pl. go through the following decisions of AAR :-

2019 (29) G.S.T.L. 789 (A.A.R. - GST) = 2019 (10) TMI 568 - AUTHORITY FOR ADVANCE RULING, KARNATAKA IN RE : SURFA COATS (INDIA) PVT. LTD.

2019 (26) G.S.T.L. 374 (A.A.R. - GST) = 2019 (6) TMI 1305 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA

2019 (22) G.S.T.L. 551 (A.A.R. - GST) = 2019 (3) TMI 540 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA IN RE : BIOSTADT INDIA LIMITED

[Himansu Sekhar]

1. First decide whether they are related persons or not under sec. 15.

2. If yes, taxable even if no consideration is received and ITC allowed.

3. If not, if a free gift without any consideration, no GST and no ITC allowed

AI Summary

Exploring GST and ITC eligibility for Diwali gold coins and watches given as promotional business expenses under Section 15. A discussion on the applicability of GST and the eligibility for Input Tax Credit (ITC) on gold coins and watches given as promotional expenses to business associates during Diwali. One participant suggests that ITC can be claimed if the items are not gifts but obligations. Another participant confirms GST is payable on such expenses and refers to specific rulings for ITC eligibility. A third participant advises determining if the associates are related persons under Section 15, affecting GST and ITC applicability, noting that free gifts without consideration do not attract GST or ITC.