TaxTMI 
TaxTMI 
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?
ITC on promotional expenses
09 Mar 2021 
3 Replies 
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GST on promotional gifts: Taxable when supplied to related parties and ITC may be claimed; free gifts not taxable.
GST and ITC on promotional items hinge on recipient relationship and transaction character: transfers to related persons are taxable even absent consideration and permit ITC; transfers arising from an obligation or business necessity may allow ITC; genuine free gifts to unrelated parties are not taxable and do not permit ITC. AAR decisions cited in the discussion corroborate these positions. (AI Summary)
GST and ITC on promotional items hinge on recipient relationship and transaction character: transfers to related persons are taxable even absent consideration and permit ITC; transfers arising from an obligation or business necessity may allow ITC; genuine free gifts to unrelated parties are not taxable and do not permit ITC. AAR decisions cited in the discussion corroborate these positions. (AI Summary)