It is common that a business entity distributes to dealers and well-wishers calendars and diaries in the New Year. Such calendars are specially made with details of products traded / manufactured by the entity printed on the same.
Though calendars are technically “gifted”, calendars etc… attract many eyeballs and many others also become aware of the company’s products.
In the above circumstances, are we right in claiming ITC on specially bought out calendars etc which are distributed free of cost.
Businesses Face Challenges Claiming ITC on Free Calendars and Diaries Under GST, Section 17(5)(g) Applies A business entity inquired about claiming Input Tax Credit (ITC) on calendars and diaries distributed free of cost for promotional purposes under the Goods and Services Tax (GST) regime. Multiple responses highlighted that such claims might not be litigation-free and are generally disallowed under Section 17(5)(g) of the CGST Act, referencing various case laws and rulings. Some argued that if these items are deemed promotional rather than gifts, ITC might be claimed, but this approach is not without legal risks. The discussion referenced decisions by authorities on similar matters, emphasizing the complexity and potential for disputes. (AI Summary)
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