ITC is not eligible on the promotional items distributed as give away items as the same is blocked by virtue of the provisions of Section 17(2) and Section 17(5)(h) of the CGST Act –  Karnataka AAAR

M/s Page Industries Limited [Order No. KAR/AAAR/05/2021- A.A.A.R. Karnataka]

In this case, Karnataka AAAR held that the promotional products/materials & marketing items used by the Appellant in promoting their brand & marketing their products can be considered as ‘inputs’ as defined in Section 2(59) of the CGST Act and the goods procured on payment of GST which are disposed of by way of gifts are barred from being eligible for ITC in terms of Section 17(5)(h) of the CGST Act, even if they are used in the course or furtherance of business. Therefore, the ITC is not eligible on the promotional items distributed as give away items on the grounds that the same is blocked by virtue of the provisions of Section 17(2) and Section 17(5)(h) of the CGST Act.

To read the complete judgment 2021 Taxo.online 1413