Question25: XYZ Ltd. had spent a total amount of Rs.19.32 Lacs towards purchase of gold where the supplier had charged GST to XYZ. XYZ had given the same as Diwali Gifts to employees. Is XYZ liable to pay GST on it'

Answer:  Our reply is as follows:  As per section 7 of CGST Act, Any supply without consideration is not covered under GST but Schedule I contains list of certain supplies which are to be considered as supply even if made without consideration.    Clause 2,Schedule I contains as follows:  Provided that the gift not exceeding  50000 rs in value in a financial year by an employer to an employee shall not be treated as supply of goods or services or both.  As per above provisions, gifts not exceeding  50000 rs will not be included in supply.. Now the question is if the value of gift is more than 50000 rs(one employee for one year) then how GST should be applied .Suppose a  TV of  55000 rs is given to an employee, In our opinion ,the total value should be taxed. It is not that 5000 (55000-50000)  is taxable amount. and in this case ITC will be available.  In case the gift is not covered under GST,as per above provisions the ITC as per section 17(5)(h) i.e goods lost, stolen, destroyed, written off or disposed off by way of gift or free samples shall not be allowed. (Reply dt. 09/12/2017)