ITC Question 35: I am a steel trader. I purchased diwali gifts (Dry Fruits etc.) for my staff/ vendors. Whether I can get ITC on this.

Answer:  Credit will not be allowed as per section 17 (5) same is as follow

Section 17: Apportionment of credit and blocked credits      (Relevant Rules 42 to 43 , Rule 38)

(1) Where the goods or services or both are used by the registered person partly for the purpose of any business and partly for other purposes, the amount of credit shall be restricted to so much of the input tax as is attributable

e) goods or services or both on which tax has been paid under section 10;

(f) goods or services or both received by a non-resident taxable person except on goods imported by him;

(g) goods or services or both used for personal consumption;

(h) goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples; and

(i)  Please do't not mix up it with the term expenditure done on diwali some people are taking credit on this on the ground that it is expenditure for business  it is wrong  argument because availability of ITC and allowing of expanse in Income tax are two different things.  (Reply Dt. 29/12/2017)