Case Law Details
In re Sanofi India Limited (GST AAR Maharashtra)
Whether input tax credit is available of the GST paid on expenses incurred towards promotional schemes of Shubh Labh Loyalty Program?
if we accept the contention of the applicant that the promotional items are supplied as a contractual obligation e.g. watch is given under the contractual obligation under the scheme with an intention to increase the sale of the company, serve as an advertisement tool and brand reminder to promote sale, then in view of section 7 of the GST Act it is a supply in the nature of barter i.e. supply of promotional goods against supply of services such as increased sale, advertisement of products and sales promotion. On the contrary appellant has accepted that impugned supply is without consideration. We therefore conclude that the transaction is nothing but a gift.
This conclusion is further supported by the nomenclature used by the applicant to the promotional items. As averred above in case of Redemption and Rewards it is submitted by the appellant that Redemption will be conducted only in the form of gift items listed on the catalogue and NO form/type/kind of conversion into cash or cash equivalent will be permitted unless deemed fit by Sanofi.
In this case and as observed above the applicant submits that the impugned supply is a contractual obligation but without any consideration, but in exchange of services of increase sale, advertisement etc. Thus applicant is taking contrary view. In taxation it is not open to a person to take simultaneously different stand.
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