Mam, a GST registered person distributes gifts worth Rs. 70,000/- to each of its employees during a financial year. Whether he can claim ITC on such gifts. Please also tell whether he has any output tax liability on such gifts distributed.
ASHU GUPTA Asked question December 20, 2020
As per para 2 of Schedule I, gifts to employees upto rs 50,000 in a FY are only exempt. As in your case this limit has been breached and accordingly complete value of such gifts will be exigible to GST. Further in such cases you can avail the ITC. however in cases where gifts less than Rs 5000/- are given neither there will be any output tax liability not ITC can be availed in light of Sec 17(5).
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Frah Saeed Changed status to publish December 21, 2020