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IndiaGST & Corporate TaxUpdated: Sep 13, 2026
Direct Answer
No, under Section 17(5) of the CGST Act, Input Tax Credit (ITC) is blocked on goods given as gifts, personal consumption, free food/beverages, and health/life insurance for employees, unless mandated by another law.
Blocked Credits
Many businesses mistakenly claim ITC on Diwali gifts, laptops given to employees permanently, or catered office lunches. These are strictly blocked under Section 17(5)(g) and (b).
The Exception
If providing a facility (like a factory canteen or transport) is obligatory under a specific law (e.g., The Factories Act), the ITC is allowable.
Accounting Impact
When booking such invoices, the GST amount must be expensed directly to the P&L (e.g., Staff Welfare Expense) rather than booked to the IGST/CGST Input ledger.