Rusen Kumar believes that this decision will provide clarity and promote a more transparent tax system.
NEW DELHI: The recent proposal in the 2023 Finance Bill to restrict input tax credit for goods and services used for Corporate Social Responsibility (CSR) activities has received the endorsement of India CSR CEO, Rusen Kumar. Kumar believes that this move will create a fairer and more balanced tax system by eliminating the potential for companies to double benefit from their contributions to society.
The proposed amendment in the GST Act has received mixed reactions from industry experts, with some believing it will clear the ambiguity surrounding the issue and others feeling the government should have focused on providing relief to the recipients of input tax credit instead. However, Kumar believes that this decision will provide clarity and promote a more transparent tax system.
On other hand, KPMG in India Partner, Indirect Tax, Abhishek Jain believes that this move will clear the air on the ambiguous issue and will provide clarity, while on the other hand, AMRG & Associates Partner Priyanka Sachdeva believes that it is a wrong step. She feels that the government should have dealt with the major issue of input tax credit and provided relief to the recipients who pay tax to the supplier but do not receive a deposit of the tax.
Kumar further states that companies are already taking advantage of various government schemes and incentives, making it inappropriate to provide additional tax credits for social programs. The restriction on input tax credit for CSR activities will help to ensure that companies are not receiving undue benefits for their contributions to society.
The 2023 Finance Bill also aims to decriminalize certain offenses under the indirect tax law and double the threshold for launching prosecution under the tax law to Rs. 2 crore. The limit has been retained at Rs. 1 crore for fake invoicing cases.
The restriction on input tax credit for CSR activities as proposed in the 2023 Finance Bill is a step in the right direction, according to India CSR CEO Rusen Kumar. The move will help create a fairer and more transparent tax system and ensure that companies are not double benefiting from their contributions to society.
(India CSR)
