Can we take GST Input Tax Credit on CSR Expenses??
The Gujarat bench of the Advance Authority Ruling (AAR) recently held That corporate social responsibility (CSR) activities under the Companies ( Policy) Rules are excluded from the normal course of business . The applicant was a private limited company, Adama India. The AAR said Adama India would not be eligible for GST Input Tax Credit under Goods and Services Tax (GST) laws. If this ruling is followed by GST authorities during assessments, it will be a big blow to Indian Incorporations which, in the backdrop of the pandemic, has spent heavily on CSR activities, such as providing medical relief by way of oxygen concentrators & sanitizers, to name a few instances. This is another classic case of divergent views on the same issue taken by two different benches of the AAR. Earlier, the ruling given by the Uttar Pradesh (UP) bench of the AAR in the case of Dwarikesh Sugar Industries . In this case, the AAR bench had held That CSR expenditure is incurred by a company to compl