Expenses Incurred for Corporate Social Responsibility (CSR) are Eligible for Claiming ITC in GST: AAR Uttar Pradesh

Case: M/s Dwarikesh Sugar Industries Limited

Questions and Rulings by the AAR:

Question: Whether expenses incurred by the company in order to comply with requirements of Corporate Social Responsibility (CSR) under the Companies Act, 2013 (‘CSR Expenses’) qualify as being incurred in the course of business and eligible for input tax credit (‘ITC’) in terms of Section 16 of the CGST Act, 2017?

Ruling by AAR: Yes.

Question: Whether free supply of goods as a part of CSR activities is restricted under section 17(5)(h) of the CGST Act, 2017?

Ruling by AAR: No.

Question: Whether goods and services used for construction of school building which is not capitalized in the books of accounts is restricted under section 17(5)(c)/ 17(5)(d) of the CGST Act, 2017?

Ruling by AAR: ITC is not available to the extent of capitalization.

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