QUESTION
I wants to gift some items on the occasion of Diwali to my Business Associates
and Clients. Whether ITC is admissible on these expenses or blocked u/s 17(5).
ANSWER
Facts of the case:
Eligibility
of ITC on Diwali gifts given to Business Associates and clients.
Law Applicable:
Section 17
sub section (5) restricts credit on following:
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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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Interpretation: Section 17(5)
restricts ITC on goods given as gifts or free samples.
In view of above ITC is not available on any goods purchased for distribution as
Diwali gifts.
Conclusion:
ITC is not admissible on Diwali gifts given to Business Associates and clients
as the same is blocked u/s 17(5)(h)(Reply
dt.29.10.2020)