Amendment to Section 17 of the Central Goods and Services Tax Act
Section 17 of the Central Goods and Services Tax Act has been amended to modify the provisions regarding input tax credits. First, in sub-section (3), the explanation has been revised. Previously, it excluded activities specified in paragraph 5 of the Schedule. Now, it specifies that this exclusion applies to the value of activities in paragraph 5 and also those activities or transactions that may be prescribed under clause (a) of paragraph 8 of the Schedule. This change clarifies which activities are exceptions to the input tax credit rules.
Additionally, a new clause (fa) has been added to sub-section (5). This clause allows for the inclusion of goods or services received by a taxable person that are used for fulfilling corporate social responsibility (CSR) obligations under section 135 of the Companies Act, 2013. This means that expenses incurred for CSR activities can now be considered when calculating input tax credits, thereby potentially reducing the overall tax liability for businesses engaged in such activities. These amendments aim to provide clearer guidelines and potentially broaden the scope of input tax credit eligibility for certain transactions and obligations.
Note: It is an AI generated summary for reference purpose only.
Amendment of section 17.
139. In section 17 of the Central Goods and Services Tax Act,—
(a) in sub-section (3), in the Explanation, for the words and figure "except those specified in paragraph 5 of the said Schedule", the following shall be substituted, namely:—
"except,—
(i) the value of activities or transactions specified in paragraph 5 of the said Schedule; and
(ii) the value of such activities or transactions as may be prescribed in respect of clause (a) of paragraph 8 of the said Schedule.";
(b) in sub-section (5), after clause (f), the following clause shall be inserted, namely:—
"(fa) goods or services or both received by a taxable person, which are used or intended to be used for activities relating to his obligations under corporate social responsibility referred to in section 135 of the Companies Act, 2013;".
