 "ITC cannot be claimed on goods/services used for CSR activities: Budget")
The Budget on Wednesday proposed certain amendments in GST Act and said that input tax credit cannot be claimed on goods/ services used or intended to be used for Corporate Social Responsibility (CSR) activities.
The amendments in the Central GST Act has been brought through the Finance Bill, 2023.
The amendments propose to decriminalise certain offences under the indirect tax law and double the threshold for launching prosecution under the tax law to Rs 2 crore. It, however, retained the limit at Rs 1 crore for fake invoicing cases.
KPMG in India Partner, Indirect Tax, Abhishek Jain said the Finance Bill proposes to restrict input tax credit paid on goods and services used for CSR activities.
"While this would be slightly disappointing for the industry, this change would clear the air on the issue which was ambiguous and was subject to contrary advance rulings," Jain said.
AMRG & Associates Partner Priyanka Sachdeva said disallowance of input tax credit related to CSR activities is a wrong step.
"It would have been better if the government would have dealt with few major issues like input tax credit, providing relief to recipients who pay tax to the supplier but they do not deposit the tax," Sachdeva said.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)