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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Input Tax Credit and Computation of GST Liability

A registered company incurs expenditure on goods and services used for activities relating to its obligations under corporate social responsibility referred to in section 135 of the Companies Act, 2013. What is the ITC position under Section 17(5)?

ITC is blocked. Section 17(5)(fa) denies credit on goods or services used or intended to be used for activities relating to CSR obligations under section 135 of the Companies Act, 2013. There is no provision for partial credit or for capital goods.

  1. AITC is allowed if the CSR spend is shown as a business expense
  2. BITC is blocked on such goods or servicesCorrect
  3. CITC is allowed at 50%
  4. DITC is allowed only on capital goods used for CSR

Explanation

Section 17(5)(fa) blocks ITC on goods or services received by a taxable person that are used or intended to be used for activities relating to CSR obligations under section 135 of the Companies Act, 2013. No partial credit is provided.

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