ITC not eligible on CSR Activity as Companies (CSR Policy) Rules, 2014

In re Adama India Private Limited (GST AAR Gujarat)

ITC ineligible on CSR activities being excluded from normal course of business

The AAR, Gujarat in the matter of M/S. Adama India Private Limited [Advance Ruling No. GUJ/GAAR/R/44/2021 dated August 11, 2021] held that, no Input Tax Credit (ITC) would be available for Corporate Social Responsibility (CSR) activities excluded from normal course of business.

Facts:

M/s. Adama India Private Limited (“the Applicant”), supplies insecticides, fungicides and herbicides. The Applicant has been spending the mandatory amount on CSR activities in the form of donations to the Government relief funds/educational societies, civil works or installation of plant and machinery items in schools or hospitals, distribution of food kits etc. Further, the vendors that supply goods/services to the Applicant for the purpose of undertaking the CSR activities charge GST on their output supplies.

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