Companies take taxman to court over denial of GST credit on gifts

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A group of companies has dragged the government and the indirect tax department to court over denying input tax credit on gifts and samples given to customers and clients. Under the Goods and Services Tax (GST) framework, companies can set off costs incurred on raw materials or input services against future tax liabilities.

However, it denies this benefit on goods distributed as gifts or given free. The Gujarat High Court on Wednesday issued notices to the government and tax department on the companies’ petition challenging the denial.

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