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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 ..... 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 has declared that the questions raised in the application have neither been decided by nor are pending before any authority under any provisions of the GST Act. The application is therefore, admitted. 4. Brief facts of the case and averments of the applicant: The applicant Bambino Pasta Food Industries is a manufacturer of Vermicelli and pasta Products. The Applicant filed for advance ruling application to know the admissibility of ITC o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 in the following words: A 'gift' is commonly defined as a voluntary transfer of property by one to another, without any consideration or compensation there for. That a 'gift' is a gratuity and an act of generosity and not only does not require a consideration, but there can be none. Citing the definition, it has been observed by the Hon'ble Court that The concept of gift is diametrically opposed to the presence of any consideration or compensation. A gift has aptly been described as a gratuity and an act of generosity and stress has been laid on the fact that if there is any consideration then the transaction ceases to be a gift. 3. That in view of above discussion, a clear distinction needs to be drawn between goods given as 'gift' and those provided /supplied as a part of CSR activities to satisfy the requirement of law. That while the former is voluntary and occasional the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 crore rupees, whichever is less and every officer in default must pay a penalty of 1/10th of the unspent amount required to be transferred to any fund included in Schedule VII of the Act or unspent CSR Account, or two lakhs rupees, whichever is less. It makes it clear that a company has no other way except to spend such CSR amount or transfer such amount to funds specified by govt. Non spending of CSR funds will definitely have an impact on the functioning of company as penal provisions will have financial impact as well as on how the brand is perceived by the customers. 8. That a Company incurs CSR expenditure under statutory compulsion, which is certainly incurred because of running of business and by no stretch of imagination, could it be considered as 'gift' for any reason. 9. That in the Advance Ruling in the case of Dwarik ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Responsibility Policy. Sub-Sec (6) Any amount remaining unspent under sub-section (5), pursuant to any ongoing project, fulfilling such conditions as may be prescribed, undertaken by a company in persuance of its Corporate Social Responsibility Policy, shall be transferred by the company within a period of thirty days from the end of the financial year to a special account to be opened by the company in that behalf for that financial year in any scheduled bank to be called the Unspent Corporate Social Responsibility Account, and such amount 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 Cor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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