Case Law Details
In re Shriram Pistons And Rings Limited (GST AAR Uttar Pradesh)
This article provides an analysis of the GST Advance Ruling (AAR) issued for Shriram Pistons and Rings Limited regarding the availment of input tax credit (ITC) for GST paid on various services and expenses related to their Corporate Social Responsibility (CSR) obligations. The ruling examines the interpretation of Section 16(1) of the CGST Act and its applicability to CSR activities.
The AAR discusses the provisions of the Companies (CSR Policy) Rules, 2014, which exclude activities undertaken in the normal course of business from the definition of CSR. The AAR notes that CSR activities must be distinct from the regular business activities of a company. Furthermore, the AAR refers to the amendments made in the definition of CSR by the Companies (CSR Policy) Amendment Rules 2021, reinforcing the exclusion of activities undertaken as part of the normal course of business.
Based on Section 16(1) of the CGST Act, which allows ITC for goods or services used or intended to be used in the course or furtherance of business, the AAR concludes that CSR activities are not eligible for ITC. The AAR asserts that CSR activities fall outside the scope of business-related activities and, therefore, ITC cannot be claimed for GST paid on such expenses.
The AAR dismisses the applicant’s argument that CSR activities could be eligible for ITC if they are considered to be in the course and furtherance of business. It clarifies that Section 16(1) of the CGST Act explicitly excludes CSR activities from the eligibility of ITC.
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