ITC not allowed on tax paid on goods or services procured for CSR activities: AAR

  • Blog|News|GST & Customs|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 17 November, 2021

Recent Posts

Blog, News, Insolvency and Bankruptcy Code

Interim Moratorium Barred Continuation of Proceedings u/s 138 of NI Act Against Petitioner Due to IBC’s Overriding Effect | HC

Blog, News, FEMA & Banking

Borrower’s Right to Redeem Secured Asset Ends on Publication of Notice u/s 9(1) of SI Rules, Not After Sale Completion | SC

Latest from Taxmann

GST Input tax credit - Eligibility and conditions for taking credit

Case Details: Authority for Advance Rulings, Gujarat Adama India (P.) Ltd. In re - [2021] 132 taxmann.com 45 (AAR - GUJARAT)

Judiciary and Counsel Details

    • Sanjay Saxena and Arun Richard, Member
    • Gorki Tiwari, Sr. Manager and Ramakrishna Hari, GM, Finance for the Applicant.

Facts of the Case

The applicant was engaged in supply of insecticides, fungicides and herbicides. It was spending the mandatory amount on CSR activities in the form of donations to the Government relief funds/educational societies, civil works or installation of plant and machinery items in schools or hospitals, distribution of food kits etc. It filed an application for advance ruling to determine whether CSR activities to be considered as in course of furtherance of business and would be eligible for ITC.

AAR Held

The Authority for Advance Ruling observed that as per the Companies Act, CSR activities are not activities undertaken in pursuance of applicant’s normal course of business. Moreover, as per Section 16(1) of CGST Act, 2017, a registered person is entitled to take credit of input tax charged on any supply of goods or services or both, which are used or intended to be used in the course or furtherance of his business. Therefore, it was held that the section 16(1) of the CGST Act bars CSR activities from input/input service and thus not eligible for ITC.

Case Review

List of Cases Referred to

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Leave a Reply

Your email address will not be published. Required fields are marked *

«
»

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied