Jury still out on ITC for free samples, promotional gifts

New Delhi: Can companies claim input tax credit for GST paid on expenses borne while giving out free samples and gifts or running promotional schemes for distributors? The question has come up many times for companies and now it has split the appellate adjudicating body in Maharashtra right down the middle in a case involving Sanofi India.

The Mumbai-based company moved the Maharashtra Appellate Authority of Advance Ruling, challenging the state Authority on Advance Ruling, which said Sanofi cannot claim input tax credit on promotional material and trade loyalty programmes under the goods and service tax regime.