ITC Availability

[Ethirajan Parthasarathy]

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.

AI Summary

Input Tax Credit denial for promotional calendars: GST exclusions and deemed-supply rules limit credit except in tight promotional cases.
Availability of Input Tax Credit on specially printed calendars and diaries distributed free is generally constrained by statutory exclusions and eligibility conditions, including the requirement of corresponding output tax liability. While many rulings disallow credit for gifts or free samples, an arguable distinction exists where items bearing the taxpayer's name or logo function as promotional or advertising materials; such factual characterization may support ITC claims but is contested and may attract a deemed supply treatment with attendant GST consequences.