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TMI Blog2022 (11) TMI 482X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 104 of CGST/TGST Rules. 2. At the outset, it is made clear that the provisions of both the CGST Act and the TGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the TGST Act. Further, for the purposes of this Advance Ruling, the expression 'GST Act' would be a common reference to both CGST Act and TGST Act. 3. It is observed that the queries raised by the applicant fall within the ambit of Section 97 of the GST ACT. The Applicant enclosed copies of challans as proof of payment of Rs. 5,000/- for SGST and Rs. 5,000/- for CGST towards the fee for Advance Ruling. The Applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s obligation to incur such expenses in order to be in compliant with the law. CSR activity is to be considered as "used or intended to be used in the course or furtherance of business" because any Company, which meets the criteria for CSR, is mandatorily required to incur in CSR activities to be in compliant with the Companies Act, 2013. That the applicant Company is compulsorily required to undertake CSR activities in order to run its business and accordingly, it becomes an essential part of its business process as a whole. 2. That as per Section 17 (5)(h) of the CGST Act, 2017, input tax credit shall not be available in respect of "goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples." That this provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... later is obligatory and regular in nature. That the CSR expenses incurred by the applicant have been mandated under the Companies Act, 2013. That it is the applicant's obligation to incur such expenses in order to be in compliant with the law. Since CSR expenses are not incurred voluntarily, accordingly, applicant is of the opinion that it doesn't qualify as 'gift' and therefore its credit is not restricted under Section 17 (5) of the CGST Act, 2017. 4. That Hon'ble CESTAT Mumbai, in the case of M/s EsselPropack Ltd. Vs. Commissioner of CGST, Bhiwandi {2018(362) E.L.T. 833 (Tri.-Mumbai) - 2018-VIL-621-CESTAT-MUM-ST}, has observed that:- "Sustainability is dependent on CSR without which companies cannot operate smooth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and may earn better profits in future.' 6. That the concept of non-availability of ITC on inputs and input services in case of free supplies of goods/services shall not be applicable in the present case since the CSR activities, which involves supply of goods or services without any consideration, are said to be done in course and furtherance of business. Therefore that any expense related to CSR activities gets incurred for the purpose of upkeep or running the business. 7. That Section 135(7) of the Companies Act, 2013, specifies that the company or business may incur a penalty of twice the unspent amount required to be transferred to any fund included in Schedule VII of the Act or unspent CSR Account, as the case may be, or one cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnel hearing on 27.09.2022 and reiterated the question and their understanding of the law and facts recorded in their application and requested to dispose the case on merits. 7. Discussion & Findings: The AAR has perused the statement of averments submitted by the applicant in their application and have reached the following conclusions: 1. The applicant has purchased an oxygen plant for Rs.62,74,200/- and has given it to AIIMS Hospital has part of their corporate responsibility under section 135 of the companies Act, 2013. 2. The sum and substance of the averments made is that these purchases are made in furtherance of their business and hence tax on such purchases is eligible for input tax credit under section 16(1) of the CGST Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount shall be spent by the company in pursuance of its obligation towards the Corporate Social Responsibility Policy within a period of three financial years from the date of such transfer, failing which, the company shall transfer the same to a Fund specified in Schedule VII, within a period of thirty days from the date of completion of the third financial year. Sub-Sec (7) If a company is in default in complying with the provisions of sub-section ( 5 ) or sub section ( 6), the company shall be liable to a penalty of twice the amount required to be transferred by the company to the Fund specified in Schedule VII or the Unspent Corporate Social Responsibility Account, as the case may be, or one crore rupees, whichever is less, and every o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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