- November 16, 2019
- Posted by: IBA LLP
- Category: Indirect Tax
Expenditure incurred on CSR – GST Friendly or not?
GST is a single tax on the supply of goods or services right from the manufacturer to the consumers. One of the major advantage available in GST which was lacking in the erstwhile indirect tax regime was the seamless flow of Input Tax Credit(ITC), while the earlier legislations imposed various restriction on credits, such conditions are now a lot relaxed with introduction of Section 17(5) of the CGST Act, 2017 mentioning a list of inward supplies for which credit is not available(Blocked credit).
ITC provisions under CGST Act
Section 16 of CGST Act, deals with the eligibility & conditions for taking credit and as per sub – section (1) of section 16 of CGST Act, every registered person is entitled to take Input Tax Credit on such supplies which are used in the course or furtherance of business. This is unlike the erstwhile Cenvat credit regime where credit was available only if the goods/services were covered by the definition of inputs, input services or capital goods. However, Input tax credit shall not be available in respect of supplies listed in section 17(5) notwithstanding anything contained in Section 16(1) of the CGST Act. Readmore..