No ITC on good/services used or intended to be used for CSR activities: Budget 2023

Budget 2023 has inserted a new clause in Section 17(5) dealing with Blocked credits. As per the proposed amendment, Input Tax Credit (ITC) on good/services used or intended to be used for Corporate Social Responsibility (CSR) activities shall be ineligible under newly added provision i.e., section 17(5)(fa).

The Amendment is as follows:

(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;”.