Understanding GST Implications on Supplies Made Under Corporate Social Responsibility

• Corporate Social Responsibility (CSR) is the responsibility towards society and the environment
• Companies with a net worth of 500 crore INR or more, turnover of 1,000 crore INR or more, or net profit of 5 crore INR or more must comply with CSR policy
• Companies must contribute at least 2% of their net profit to CSR activities
• Majority of CSR funds are used for activities like promoting gender equality, education, rural development, and disaster relief
• Input Tax Credit (ITC) cannot be availed on CSR activities as they involve providing goods or services free of cost
• Some argue that ITC should be available on CSR activities as they enhance the company’s reputation and are necessary for business
• Case law examples show conflicting views on whether ITC can be claimed for CSR expenses

Source: mastersindia.co

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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