Tactical Gambit of ITC Discontinuation on CSR Spends - Does it Affect Corporate Value Addition in Philanthropic Causes?

Abstract

Taxation is a critical variable that impacts production volume and pattern, which, in turn, influences the economy's growth trajectory. India's GDP has increased from USD 2 trillion to over USD 4 trillion during the last ten years. The socio-economic benefits accruing from public-private partnerships further help to achieve Sustainable Development Goals (SDGs). Goods and services tax (GST), being a unified taxation framework in India, has resulted in increased revenues for the Government, simplifying returns for the taxed entities. GST derived from CSR activities mainly focused on development sectors like education, health, rural development, and others are mostly exempt from taxes. Input tax credit (ITC), integral to GST, has reduced the business burden.