India Govt Considers Giving Input Tax Credit For PPEs, Goods

The Indian government is looking into a request to allow companies to receive input tax credits for pandemic-related items such as personal protective equipment (PPE), sanitizers, and other similar goods, said The Economic Times. The pertinent government body is expected to give a decision soon.

According to the report, officials received petitions for the relaxation of Section 17 (5)(h) of the Central Goods and Services Tax (CGST) Act 2017. This provision prohibits the granting of tax credits on items that were given for free. This includes gifts, and lost, stolen, destroyed or written off goods.

The virus pandemic relief has been assisted greatly by the private sector through donations of PPEs and relief goods. On this note, the Central Board of Indirect Taxes and Customs (CBIC) is examining the possibility of relaxing the stipulation through corporate social responsibility (CSR) rules.

Input Tax Credit For PPEs

Existing CSR rules state that companies can count funds for pandemic-related activities as CSR expenditure. Such activities can include services offered without charge like free hotel accommodations for front liners.

Regarding this, an unnamed government official said, “If services are given by the company as part of CSR then there is no need for such reversal of input tax credit.” He added that if such restriction does not apply to services, then it should be considered for a removal for items.

Pratik Jain, a PwC India partner, said that there is an on-going debate regarding the application of the CGST Act and CSR rules. He is optimistic that a decision from the government would make more room for the private sector to funnel more funds as part of their CSR.

KPMG partner Harpreet Singh also noted that input tax credits should be available on pandemic-related goods as these are considered essential business expenses.

RELATED ARTICLES

Program for an Electric Vehicle Tax Credit for Union-Built Vehicles
Credit

Program for an Electric Vehicle Tax Credit for Union-Built Vehicles Faces Obstacle

House Democrats' plan to provide customers with an additional option to encourage union-built vehicles has sparked controversy and discussion among legislators, manufacturers, and other parties. The House Ways and Means Committee last week cleared the tax breaks for consideration in the Democrats' $3.5 trillion budget bill measure, despite vocal objections...
Williams-Sonoma Key Rewards Credit Card Program
Credit

Williams-Sonoma and Capital One Introduce The Key Rewards Credit Card Program

Williams-Sonoma, Inc., a leading American home retail company, revealed that it has partnered with bank holding company Capital One to introduce the Key Rewards Credit Card Program. The company’s top-level Key Rewards program is upgraded with new credit cards. Cardholders can accumulate rewards when they shop at Williams Sonoma, Inc....
Federal Bank Credit Cards In Partnership With Visa
Credit

Federal Bank Introduces Credit Cards In Partnership With Visa

Federal Bank has announced the introduction of its credit card in India. To offer credit cards to its current clients, the private banking company has collaborated with Visa, the worldwide financial services corporation. As per Shyam Srinivasan, Managing Director and CEO of Federal Bank, the issuance of the card would...
Wells Fargo Personal Credit Lines Closure Plan
Credit

Wells Fargo Drops Personal Credit Lines Closure Plan

Wells Fargo & Co. sparked a public outcry when it announced plans to phase down personal lines of credit in July, but the firm will reverse direction on August 18, 2021. Customers who have been using their personal credit lines have just received notice from the San Francisco-based lender...
Universal Credit Human Rights Legislation
Credit

The Reduction in Universal Credit Violates Human Rights Legislation

According to the UN's poverty expert, reducing universal credit by £20 per week is an "unjustifiable" decision that violates human rights law and would certainly lead to an expansion of poverty. The retreat of the £1,000-a-year uplift from next month, according to Olivier De Schutter, the UN-appointed chair of the...
Credit Cards Dark Web Data Leak
Credit

Hackers Leak 1M Credit Cards on the Dark Web

One million stolen credit cards have been posted by hackers on the Dark Web through AllWorld.Cards. The act was reportedly done by cybercriminals in an attempt to promote their activities and operations, as well as make their organization known. The leaked credit card information was discovered by cybersecurity researchers from...
Carter’s Child Tax Credit May Boost Children’s Apparel Business
Credit

Carter’s Says Child Tax Credit May Boost Children’s Apparel Business

Carter’s, an American retailer for children’s apparel, says that with the new child tax credit rolling out across the United States, and as the usual shopping for back-to-school resumes, the company is confident about its opportunities. To meet the consumers’ demand, the company is being compelled to pay extra to...
Younited Credit Yields Million in Fund
Credit

Younited Credit Yields $170 Million in Fund Round

Younited Credit, a France-based company, has secured $170 million in fund round. Consumers in Europe can choose from a variety of credit options offered by the startup. It also employs a multi-distribution method. The funding round, which is led by Goldman Sachs, has participants including existing investors such as Bpifrance,...
Sterling Construction Modifies Credit Agreement
Credit

Sterling Construction Modifies Credit Agreement with BMO Harris Bank

Sterling Construction Company, Inc. has modified its current credit agreement with BMO Harris Bank, its lending group. It has revealed that numerous terms of the agreement are revised. Two of the terms include lowering the existing credit agreement borrowing interest rate by 2% points and reducing the credit agreement's future...