ITC on business promotion event

[Soham Patil]

Had a doubt regarding availing ITC in the following cases. Would really appreciate if someone could guide me through.

1) I have hired a event management company to organize an event for business promotion where my clients and employees will be the attendees. Food will also be provided in the event to the attendees. The event management company charged me a lumpsum amount in the invoice for organizing the event ( no bifurcation) . Can I claim the ITC on the same?

 

2) What would be the scenario if the invoice showed separately the amount charged for banquet, food , decoration,etc.

Would I be eligible for claiming the ITC?

 

3) In both the cases above, if I avail the services through a hotel (not through an event management company) what will be the scenario.

Will I be eligible to claim ITC?

[VENU K]

The event management company must have billed you as a composite supply of event management service. In my opinion you can claim credit if otherwise eligible as per ITC restrictions.

Sec 17(5)(b)(i) blocks credit on food and beverages, outdoor catering etc . So in my opinion Scenario 2 and 3 will block your credit relating to food, beverages, outdoor catering etc.

[Shilpi Jain]

First scenario eligible.

Other scenarios, the HSN code mentioned in the expense invoice is critical to comment on the eligibility.

[Shilpi Jain]

If its a composite supply in first scenario, there should be no reason why the same principle should not apply to the other 2 scenarios and credit should be eliigble. But ensure proper HSN is mentioned in the invoice.

AI Summary

Input tax credit for event supplies hinges on composite supply treatment and exclusions for food and catering services. Eligibility to claim input tax credit depends on whether the supply is a composite event management service and on the exclusion for food, beverages and outdoor catering under Sec 17(5)(b)(i). A lump-sum composite invoice is treated as potentially eligible if ITC conditions are met; itemised invoices or hotel-provided catering that identify charges for food/beverages/outdoor catering render those portions ineligible. Invoice details and HSN/service description are critical to determine claimability.