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TMI BlogITC on goods received for business promotion or marketing expensesX X X X Extracts X X X X X X X X Extracts X X X X ..... ITC on goods received for business promotion or marketing expenses X X X X Extracts X X X X X X X X Extracts X X X X ..... their agents irrespective of the business they bring to them. Since the outward supply is of vehicles and the inward supply is of some gift items, is ITC eligible in this case? Please help. Reply By Shilpi Jain: The Reply: If these articles are given without any obligation (i.e. not mentioned in any document that the dealers would be entitled to these) then credit would not be eligible. Reply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... By VENU K: The Reply: We can visualise two scenarios in this case. Both will have the effect of making ITC meaningless in my opinion 1. Sec 17(5)(h) Blocks input on goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples. No ITC alowable in this case 2. Schedule 1 Activities to be treated as supply even if made without consideration ... Para 1.Permanent trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fer or disposal of business assets where input tax credit has been availed on such assets Remember gold becomes a business asset on purchase. In this case if you claim input credit, out put tax could be demanded , may be even at the rate applicable to automobiles !!! Reply By Sadanand Bulbule: The Reply: Also refer Discussion ID No.119371 dated 23/10/2024 for additional information. Reply By ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Yash Shah: The Reply: According to Section 17(5)(h) of the CGST Act 2017, ITC is blocked with respect to goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples. Further, as per Circular No. 92/11/2019-GST, ITC shall not be available to the supplier on the inputs, input services and capital goods to the extent they are used in relation to the gifts or free sample ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s distributed without consideration. However, where the activity of distribution of gifts or free samples falls within the scope of 'supply' on account of the provisions contained in Schedule I of the said Act, the supplier would be eligible to avail of the ITC. In the given case, gifts from the company to their agents without consideration do not fall under Schedule I. Therefore, in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, ITC is blocked u/s 17(5)(h). X X X X Extracts X X X X X X X X Extracts X X X X
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