Input tax credit on Lottery Gifts

[Priyesh Mamnani]

A private lottery distributor selling lottery tickets to customers. He is purchasing gifts that are to be distributed to the lottery winners after the result.

Whether the lottery distributor is eligible to claim the GST credit on gifts given to lottery winners as per the GST law?

AI Summary

Lottery Distributor's GST Input Tax Credit on Gifts Debated; Section 17(5)(h) CGST Act Blocks ITC on Gifted Goods A private lottery distributor inquired about the eligibility to claim GST input tax credit (ITC) on gifts given to lottery winners. Multiple experts responded, referencing Section 17(5)(h) of the CGST Act, which blocks ITC on goods disposed of as gifts. The consensus was that gifts are not eligible for ITC unless the cost is included in the taxable value of the lottery ticket, thus making it part of the outward supply. Some argued that if the gift is an obligation or part of the lottery price, it might not be considered a gift, potentially allowing ITC. However, this remains a contentious issue.