{"id":10624,"date":"2020-06-12T17:49:13","date_gmt":"2020-06-12T12:19:13","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=10624"},"modified":"2020-06-15T14:05:05","modified_gmt":"2020-06-15T08:35:05","slug":"input-tax-credit-for-masks-ppes-putting-up-a-fight-against-covid-19","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/input-tax-credit-for-masks-ppes-putting-up-a-fight-against-covid-19\/","title":{"rendered":"Input Tax Credit for Masks, PPEs- Putting up a Fight against COVID-19"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The government could allow firms to seek <strong><em>input tax credit for masks, PPEs,\nsanitizers,<\/em><\/strong> and <strong><em>other goods<\/em><\/strong> of similar nature that\nthey have <strong><em>donated<\/em><\/strong> as well as <strong><em>supplied<\/em><\/strong> for free to withstand <strong><em>coronavirus\npandemic<\/em><\/strong>. One of the officials in CBIC stated that several\nrepresentations demanding relaxation got received by the government in <strong><em>section\n17- subsection 5(h) of the CGST Act, 2017<\/em><\/strong>. It doesn&#8217;t allow for credit\non goods given in the form of a gift or destroyed, lost, or offered for free as\nwell.<\/p>\n\n\n\n<p>According to the sources reports, several firms\/companies have made an\napproach to the government for getting relaxation in <strong><em>CGST norms<\/em><\/strong>. CBIC\nofficials clarified that decisions regarding the relaxation with respect to the\ninput tax credit for masks, PPEs, and various goods of the same family would\ncome out very soon.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/input-tax-credit-for-masks-ppes-putting-up-a-fight-against-covid-19\/#Observations_on_Input_Tax_Credit_for_Masks_PPEs\" >Observations\non Input Tax Credit for Masks, PPEs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/input-tax-credit-for-masks-ppes-putting-up-a-fight-against-covid-19\/#What_is_Input_Tax_Credit\" >What is Input Tax Credit?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/input-tax-credit-for-masks-ppes-putting-up-a-fight-against-covid-19\/#Expenses_Allowed_for_Input_Tax_Credit_for_Masks_PPEs_Sanitizers_and_Other_Nature_of_Staff_Welfare_Expenses\" >Expenses\nAllowed for Input Tax Credit for Masks, PPEs, Sanitizers and Other Nature of Staff\nWelfare Expenses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/input-tax-credit-for-masks-ppes-putting-up-a-fight-against-covid-19\/#Clarification_from_the_Ministry_of_Corporate_Affairs_Concerning_Expenses_that_would_qualify_as_CSR_Expense\" >Clarification\nfrom the Ministry of Corporate Affairs Concerning Expenses that would qualify\nas CSR Expense<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/input-tax-credit-for-masks-ppes-putting-up-a-fight-against-covid-19\/#Directives_for_Workplaces_by_Ministry_of_Home_Affairs\" >Directives\nfor Workplaces by Ministry of Home Affairs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/input-tax-credit-for-masks-ppes-putting-up-a-fight-against-covid-19\/#Expenses_Not_Treated_as_CSR_Expense_and_Thus_No_Admissibility_for_ITC\" >Expenses Not Treated as CSR Expense and Thus, No Admissibility for ITC<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/input-tax-credit-for-masks-ppes-putting-up-a-fight-against-covid-19\/#Take_Away\" >Take Away<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Observations_on_Input_Tax_Credit_for_Masks_PPEs\"><\/span>Observations\non Input Tax Credit for Masks, PPEs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li><strong><em>Industry experts<\/em><\/strong> have also put their point on the <strong><em>input tax credit for masks, <\/em><\/strong><em><a href=\"https:\/\/corpbiz.io\/ppe-kit-certification\"><strong>PPEs Kit<\/strong><\/a><\/em><strong><em>, sanitizers, and other items<\/em><\/strong>. Rules of <strong><em>corporate social responsibilities<\/em><\/strong> are in favor of the companies\/ firms to clear up expenses related to corona virus. Furthermore, CBIC officials emphasized on tax benefits on goods donated or distributed could be added to <strong><em>corona virus related expenses<\/em><\/strong>.<\/li><li>It has observed that amidst of <em><a href=\"https:\/\/corpbiz.io\/learning\/covid-19-outbreak-sebi-relaxes-compliance-requirements-for-companies\/\"><strong>COVID-19 outbreak<\/strong><\/a><\/em> in India, the <strong><em>purchase of gloves, masks, and sanitizers<\/em><\/strong> would fall under the category of <strong><em>essential business expenditure<\/em><\/strong>. Therefore, all the companies should get the benefit of input GST.\u00a0 <\/li><li>Moreover, in compliance with a different viewpoint, the debate always been existed whether corporate social responsibilities spend was eligible for ITC or whether it is for the sake of business purpose, if the government makes <strong><em>proper clarification<\/em><\/strong> on it. Hereby, it will act as a source of encouragement for businesses and corporate to take more <strong><em>CSR initiatives<\/em><\/strong> like this.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Input_Tax_Credit\"><\/span>What is Input Tax Credit?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"574\" height=\"280\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-81.png\" alt=\"Input Tax Credit\" class=\"wp-image-10625\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-81.png 574w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-81-300x146.png 300w\" sizes=\"(max-width: 574px) 100vw, 574px\" \/><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Expenses_Allowed_for_Input_Tax_Credit_for_Masks_PPEs_Sanitizers_and_Other_Nature_of_Staff_Welfare_Expenses\"><\/span>Expenses\nAllowed for Input Tax Credit for Masks, PPEs, Sanitizers and Other Nature of Staff\nWelfare Expenses<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>In accordance with the MHA Guidelines, the following staff welfare expenses\nwould get allowed for input tax credit during the pandemic-<\/em><\/strong><\/p>\n\n\n\n<ul><li>Before corona virus pandemic, <strong><em>expenses<\/em><\/strong> related to <strong><em>masks, sanitizers, and similar equipment<\/em><\/strong> were not eligible for the <strong><em>input tax credit<\/em><\/strong>. However, at the time of the epidemic, they have become eligible for availing ITC benefits, not in all the cases. According to the <strong><em>CGST Act, 2017 input tax credit for masks, PPEs, sanitizers<\/em><\/strong>, and other <strong><em>staff welfare expenses<\/em><\/strong> is <strong><em>unavailable<\/em><\/strong> except in the case where it becomes mandatory for an employer to provide the same to staff working under them within <strong><em>legal guidelines<\/em><\/strong> for the time being in force. <\/li><li>Before pandemic, No ITC was applicable for expenses on <strong><em>health insurance of workers<\/em><\/strong>, but during the pandemic, these <strong><em>expenses on medical insurance<\/em><\/strong> will be <strong><em>allowed<\/em><\/strong> for the <strong><em>input tax credit<\/em><\/strong>. A <strong><em>letter<\/em><\/strong> should get obtained from the insurance company to make sure that the insurance policy received by the <strong><em>assessee<\/em><\/strong> comes under the <strong><em>purview of the Ministry of Corporate Affairs guidelines<\/em><\/strong>. <\/li><li>Prior to the COVID-19 outbreak, <strong><em>expenses related to transport services<\/em><\/strong> for employees where the public, as well as private transport, is not easily available, were <strong><em>not eligible for ITC<\/em><\/strong> but amid <strong><em>pandemic<\/em><\/strong>, will be <strong><em>eligible<\/em><\/strong> for <strong><em>availing<\/em><\/strong> the <strong><em>benefits of ITC.<\/em><\/strong><\/li><li><strong><em>No ITC<\/em><\/strong> was available for <strong><em>expenses<\/em><\/strong> concerning <strong><em>food and beverages<\/em><\/strong>, and even during the pandemic, there is no eligibility since not <strong><em>decreed by law<\/em><\/strong>. <\/li><\/ul>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/applicability-of-itc-on-capital-goods-under-gst\/\">Applicability of ITC on Capital Goods under GST<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Clarification_from_the_Ministry_of_Corporate_Affairs_Concerning_Expenses_that_would_qualify_as_CSR_Expense\"><\/span>Clarification\nfrom the Ministry of Corporate Affairs Concerning Expenses that would qualify\nas CSR Expense<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>The <strong><em>Ministry of Corporate Affairs<\/em><\/strong> has\ndefined spending of CSR funds during <strong><em>COVID-19 pandemic<\/em><\/strong> shall qualify as\nCSR expense conforming to <strong><em>vide No. 10\/2020 &#8211; dated March 23, 2020<\/em><\/strong>.\n<\/li><li>All the contributions made to the <strong><em>&#8216;PM\nCARES Fund&#8217;<\/em><\/strong> must qualify as <strong><em>CSR expenses<\/em><\/strong>. <\/li><li>The contribution made in favor of SDMA, i.e., <strong><em>State\nDisaster Management Authority<\/em><\/strong> to wage war against <strong><em>COVID-19 Management Authority<\/em><\/strong>\nmust get qualified as CSR expenditure.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Directives_for_Workplaces_by_Ministry_of_Home_Affairs\"><\/span>Directives\nfor Workplaces by Ministry of Home Affairs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Ministry of Home Affairs had issued a directive for the workplace\nthat would appear as a basis for the input tax credit for masks, PPEs,\nsanitizers, and different types of staff welfare expenses. Some of the\ndirectives are given below-<\/p>\n\n\n\n<ul><li><strong><em>Regular sanitization<\/em><\/strong> of the whole\noffice and those points which can probably come into human contact<\/li><li>Special provision for <strong><em>thermal screening<\/em><\/strong>, <strong><em>sanitizer<\/em><\/strong>\nalong with <strong><em>hand wash<\/em><\/strong> would get served at the entry and exit point<\/li><li>All areas on the <strong><em>premises<\/em><\/strong> must get <strong><em>disinfected<\/em><\/strong><\/li><li><strong><em>Covering face<\/em><\/strong> with the <strong><em>mask<\/em><\/strong>\nis compulsory at workplaces<\/li><li>Employees showing any <strong><em>COVID-19 symptoms<\/em><\/strong> must be\nsent in no time for a checkup in the nearest clinics or hospitals<\/li><li><strong><em>Health insurance<\/em><\/strong> must be a mandatory\nthing for workers<\/li><li><strong><em>Special transportation facility<\/em><\/strong> for\nworkers coming from faraway places<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Expenses_Not_Treated_as_CSR_Expense_and_Thus_No_Admissibility_for_ITC\"><\/span>Expenses Not Treated as CSR Expense and Thus, No Admissibility for ITC<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Payment of wages to <strong><em>daily wage workers or temporary workers<\/em><\/strong> throughout the period of lock down completely comes under contractual obligations. Hence, it shall not qualify as CSR expenditure under <em><strong>section 135 of Companies Act, 2013<\/strong><\/em><sup><a href=\"https:\/\/www.mca.gov.in\/Ministry\/pdf\/CompaniesAct2013.pdf\"><strong>[1]<\/strong><\/a><\/sup>, and no applicability of ITC on them. <\/li><li> During the <strong><em>lock down phase<\/em><\/strong>, payment of <strong><em>salary\/wages to employees<\/em><\/strong>, as well as workers fulfilling their job and responsibilities, shall not get counted under <strong><em>CSR expenditure<\/em><\/strong>, and thus, no ITC will be admissible.  <\/li><li><strong><em>CM Relief Fund or State Relief Fund<\/em><\/strong> for Corona virus pandemic does not come under the purview of <strong><em>Schedule 7 of Companies Act, 2013<\/em><\/strong>. Hence, it will not qualify as CSR expenditure and thereby, no admissibility of ITC on these funds.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Take_Away\"><\/span>Take Away<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>As the tax experts are saying, the Indian government must permit input tax credit for <em><strong>mask,<\/strong> <strong>PPEs Kit<\/strong><\/em><strong><em>, sanitizers, and other similar items<\/em><\/strong>. Apart from this, the employer can avail <strong><em>input tax credit benefit<\/em><\/strong> for the staff welfare expenses amid <strong><em>COVID-19.<\/em><\/strong> Let&#8217;s see what action the government is going to take for the economic revival amid the <strong><em>corona virus pandemic.<\/em><\/strong><\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/approvals-required-to-meet-the-requirement-of-face-mask-and-ppe-kit-license\/\">Approvals Required to Meet the Requirement of Face Mask and PPE Kit License<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The government could allow firms to seek input tax credit for masks, PPEs, sanitizers, and other goods of similar nature that they have donated as well as supplied for free to withstand coronavirus pandemic. One of the officials in CBIC stated that several representations demanding relaxation got received by the government in section 17- subsection [&hellip;]<\/p>\n","protected":false},"author":19,"featured_media":10626,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[10],"tags":[657,658],"acf":{"service_id":"78"},"authorName":"Margesh Rai","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2024\/03\/Margesh.png","authorDescription":"With 10+ years of creative writing experience and 500+ blogs and thought leadership articles to his credit, Margesh Rai has left a significant impact in the field of content marketing. A published author and poet, Margesh Rai has experience writing for 20+ segments, such as Legal, Fintech, SAAS, Dairy, Real Estate, Hospitality, Recruitment, Sustainability, etc.","postViews":4993,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/10624"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=10624"}],"version-history":[{"count":13,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/10624\/revisions"}],"predecessor-version":[{"id":10747,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/10624\/revisions\/10747"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/10626"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=10624"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=10624"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=10624"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}