Question
Whether ITC is available or blocked u/s17(5),
on purchase of following items by a assessee for distribution as DIWALI GIFTS to
his customers-
a) DRYFRIUIT or SWEET BOXES
b) DINNER SET or SIMILAR OTHER ITEM
Answer
In GST credit is restricted under section 17 of
CGST Act.
Section 17 sub section (5) restricts credit on following:
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(b) the following supply of goods or services or both:'
(i) food and beverages, outdoor catering, beauty treatment, health services,
cosmetic and plastic surgery except where an inward supply of goods or services
or both of a particular category is used by a registered person for making an
outward taxable supply of the same category of goods or services or both or as
an element of a taxable composite or mixed supply
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(h) goods lost, stolen, destroyed, written off or disposed of by way of gift or
free samples
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In view of above ITC is not available on any goods such as Dryfruit, dinner set
etc purchased for distribution as Diwali gifts.(Reply dt.25/10/2018)