Whether ITC is available
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Case Title |
PSK Engineering Construction & Co. |
|
Court |
Authority for Advance Ruling,Madras High Court |
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Honorable Judges |
Member M.V.S. Choudary & Member K. Phanindra Reddy |
|
Citation |
2022 (2) GSTPanacea 376 HC Madras A.R. APPEAL NO. 01/2022/AAAR |
|
Judgement Date |
23-February-2022 |
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Council for Petitioner |
S. Sridharan & G. Viswanathan |
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Council for Respondent |
Not applicable |
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In favour of |
Respondent |
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Section |
Entry No. 3(vi) of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 |
The Authority for Advance Ruling, M.P. Ravi Prasad and T. Kiran Reddy, has held that AAR held that the rewards extended to retailers/stockist under scheme were not in nature of discount, therefore, ITC of GST paid on such inputs/input services procured would not be available.
FACTS OF THE CASE
The appellant was engaged in the business of manufacture and supply of ghee and other products and sold products through various retail stores across the country. With the objective of expanding the market share, the appellant had launched a sales promotional offer to enhance sales of its products. It filed an application for advance ruling to determine whether ITC would be eligible on inputs/input services procured to implement promotional scheme. The Authority for Advance Ruling held that GST paid on inputs/input services procured by the appellant to implement the promotional scheme was not eligible for Input Tax Credit under the GST law. It filed appeal against the order.
Whether ITC is available
COURT HELD
The Appellate Authority for Advance Ruling observed that goods and services distributed under promotional scheme were without consideration and those goods and services were not for further supply but for consumption by retailers under scheme. Moreover, the inputs and input services procured by appellant were for his buyers provided as rewards and not for his own activity such as advertising product. Since, the rewards extended to retailers/stockist under scheme were not in nature of discount, therefore, ITC of GST paid on such inputs/input services procured would not be available.
Whether ITC is available
ANALYSIS OF THE JUDGEMENT
By noticing the above order we analyse that ITC is not available on input services procured for promotional schemes.
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