Budget 2023 GST Proposal
ITC in respect of goods or services procured to fulfil obligations under Corporate Social Responsibility (CSR) as per section 135 of the Companies Act, 2013 is proposed to be blocked
List of blocked credit in section 17(5) is set to further increase. ITC in respect of goods or services procured to fulfil obligations under Corporate Social Responsibility (CSR) as per section 135 of the Companies Act, 2013 is proposed to be blocked.
There have been various opinions on this issue of whether ITC on CSR activities is available or not, many judgements given by AARs of Uttar Pradesh, Tamil Nādu etc have said that ITC on CSR shall be available whereas many AARs of Gujarat, Kerala etc have denied this credit.
The proposed amendment says:
It is made clear that ITC on CSR activities will be disallowed from the date on which this amendment is notified
ITC on CSR activities which was routinely being disputed by the dept will get legitimised till this amendment is notified.
ITC on CSR already reversed by taxpayers either voluntarily or under
instruction of the department can be re-availed.
Those tax payers which have chosen to not avail the ITC on CSR activities can re-avail the same keeping in mind the timelines prescribed under section 16.
