- The GST Council may consider amendments to section 17(5) of the CGST Act to unblock input tax credit (ITC) on employee life/health insurance, outdoor catering, free samples, and goods destroyed or written off.
- The Law Committee views group life and health insurance for employees, and outdoor catering for business events/staff functions, as legitimate business expenses and recommends allowing ITC; ITC would still not apply to personal/non-business use.
- ITC may also be restored for free samples, especially in sectors like pharma and FMCG where samples are used for market development and customer acquisition.
- ITC may be allowed where goods are destroyed or written off due to expiry/shelf-life compliance requirements.
- There was no consensus on ITC for motor vehicles and their leasing/renting/hiring; the Council will decide, with some members warning of possible misuse for personal consumption.
Source: a2ztaxcorp.net
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
