A clear distinction needs to be drawn between goods given as ‘gift’ and those provided /supplied as a part of CSR activities. While the former is voluntary and occasional, the later is obligatory and regular in nature. CSR expenses incurred by the applicant have been mandated under the Companies Act, 2013. It is the applicant’s obligation to incur such expenses in order to be in compliant with the law. Since CSR expenses are not incurred voluntarily, accordingly, we are of the opinion that they do not qualify as ‘gifts’ and therefore its credit is not restricted under Section 17(5) of the CGST Act, 2017.
To summarize, Manufacture, Supply, Installation and Commissioning of Lifts/ Elevators is in the nature of Works Contract activity which results in creation of an immovable property. Hence in view of the above discussions and Explanation to Section 17 of the CGST Act, we are of the opinion that the applicant is not entitled to ITC of GST paid on replacement of existing Lift/Elevator, in its premises.
From the submissions made on this issue it is seen that the applicant neither owns the said goods nor delivers the same to their customers. Applicant only facilitates the transaction between the buyer and the seller through their website and acts as an intermediary. We find that there is no sale of goods undertaken by the applicant in this case, therefore such supply will not be considered at all, as sale of goods effected by the applicant. When there is primarily, no sale of goods by the applicant, the question as to whether such supply will be considered as export sale under GST ACT does not arise at all.
As per provision of section 95 of CGST ACT, this authority can give a ruling to an applicant on matters or questions raised, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant.
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