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TMI Blog2024 (12) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... r intended to be used in the course of furtherance of his/her business and that the said amount shall be credited to the Electronic Credit Ledger of such person - The credit that is available under Rule 16(1) of the respective GST enactments is subject to such conditions/restrictions as may be prescribed and in the manner specified in Section 49 of the respective GST enactments - Section 17(5) is an exception to not only Section 16(1) of the respective GST enactments but also Section 18(1) of the respective GST enactments. In this case, this Court is not concerned with the situations contemplated under Section 18(1) of the respective GST enactments. As per Section 17(5) of the respective GST enactments, notwithstanding anything contained in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand that was earlier confirmed vide Assessment Orders dated 29.11.2019 has been affirmed insofar as denial of Input Tax Credit availed on goods viz., Gold Coins and T-shirts purchased by the petitioner for sales promotion of the goods manufactured by the petitioner for the respective Assessment Years. 3. In W.P.No.35 of 2022 for Assessment Year 2019-2020 apart from the above issue additional issue relating to stock variation pursuant to inspection and audit conducted at the premises of the petitioner on 28.08.2019 has also been confirmed by the Impugned Orders. 4. Initially, the petitioner had challenged the Assessment Orders dated 29.11.2019 passed for the respective Assessment Years in W.P.Nos.2885, 2888 and 2890 of 2020. 5. By a Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner was entitled to take Input Tax Credit charged on the supply of both goods or services or both which were used or intended to be used in the course or furtherance of the business. 9. It is submitted that the sales promotional activity has been recognized by the Authorities both under the Tamil Nadu Value Added Tax (TNVAT) Act, 2006 regime and under the Central Excise (CE) Act, 1944 and the jurisprudence on this aspect is well settled by a plethora of the decisions of the Hon'ble Supreme Court of India. 10. It is therefore submitted that the denial of Input Tax Credit on the tax paid on Gold Coins and T-shirts which were offered to intermediate dealers/retail dealers to promote the sales of products of the petitioner ought to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y way of gift or free samples. It is therefore submitted that the question of petitioner having unfettered right to avail Input Tax Credit on solitary reading of Section 16(1) of the CGST Act, 2017 is incorrect. 15. That apart, the learned Government Advocate for the respondents submits that restriction under Section 17(5) of CGST Act, 2017 particularly in Section 17(5)(h) stares at the petitioner and therefore the Impugned Order which upheld the Order passed earlier on 29.11.2019 insofar as denial of Input Tax Credit on the sales promotional activity is liable to be upheld. Hence, submits that Writ Petitions are liable to be dismissed on this count. As far as stock deficit is concerned, it is submitted that the Order is well-reasoned and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- (1) ..... (2) ..... (3) ..... (4) ..... (5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely: (a) ..... (b) ..... (c) ..... (d) ..... (e) ..... (f) ..... (g) ..... (h) goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples. 17. Apportionment of credit and blocked credits :- (1) ..... (2) ..... (3) ..... (4) ..... (5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely: (a) ..... (b) ..... (c) ..... (d) ..... (e) ..... (f) ..... (g) ..... (h) goods lost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by way of gift or free samples will specifically apply to the goods whether manufactured or traded by an assessee under the provisions of the respective GST enactments. 27. Therefore, it cannot be said that the petitioner is entitled to input tax credit for the items meant for sales promotional activities. The views of the Karnataka Authority for Advance Ruling and Telangana State Authority for Advance Ruling are rules in personam in terms of Section 98(4) of the respective GST enactments are correct. 28. Be that as it may, since the provisions of the respective GST enactments are clear in terms of Section 17(5)(h) of the Act, the petitioner was not entitled to avail the input tax credit on T-Shirts and Gold Coins purchased for Sales Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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