Goods and Services Tax – Started By: – PAWANKUMAR GARG – Dated:- 25-11-2017 Last Replied Date:- 23-6-2018 – SIR ONE OF MY CLIENT DEALS IN TRADING OF TEA AND HE GIVES BUSINESS PROMOTION SCHEMES TO THE DEALERS / CUSTOMERS. MY QUESTION IS WHETHER HE IS ELIGIBLE FOR ITC ON SCHEME ITEMS SUCH AS LED, MOBILE SET AND OTHER ELECTRONICS ITEMS. – Reply By Ganeshan Kalyani – The Reply = Promotion expense is done to increase the turnover of the business. Thus promotion expense incurred is in course and for furtherance of business. Hence , input tax credit is eligible. However, if any gift item is given to customer then input tax credit is not allowed. – Reply By PAWANKUMAR GARG – The Reply = SIR,IN BUSINESS PROMOTION WE GIVES LED TV FREE OF COST AGAINS
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f consideration received for the supply of product and accordingly ITC is available in those cases. Hence each case is to be dealt as per the facts. – Reply By KASTURI SETHI – The Reply = We call the items free but virtually it is not free. It is an eye wash. The cost of free items are always included in the price of main product. – Reply By CS SANJAY MALHOTRA – The Reply = Sh. Kasturi ji,Completely in agreement with you and hence the cost of promotional items i.e. Buy 1 Get 1 free signifies that the Sales price is for 2 products and not one. Can;t be termed as FOC supplies. Maximum it can be termed as Invoiced Qty, Discount Qty and Billed Qty for valuation. – Reply By YAGAY and SUN – The Reply = Input Tax Credit needs to be reversed in suc
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