GST Applicability and Input Tax Credit on Book Purchases for Employee Training

GST Applicability and Input Tax Credit on Book Purchases for Employee Training

Businesses often invest in resources to enhance the skills of their employees. A common question that arises is the applicability of Goods and Services Tax (GST) on the purchase of books for such training and the eligibility to claim Input Tax Credit (ITC) on these purchases. This article clarifies the GST implications on both printed and digital books.

1. GST on Printed Books:

Printed books are generally exempt from GST. This exemption means that vendors should not charge GST on the sale of printed books.

GST rate for books is currently 0% I.E EXEMPT . And the HSN code for books is 4901. the 0% GST rate applies to all printed books, including textbooks, reference books and storybooks. This rate is applicable throughout India. The HSN code 4901 specifically refers to printed books, brochures leaflets and similar Printed Matter.

2. Input Tax Credit (ITC) on Printed Books:

Since no GST is levied on the supply of printed books, the question of claiming Input Tax Credit (ITC) does not arise. ITC can only be claimed on goods or services where GST has been paid. Therefore, businesses purchasing printed books for employee training cannot claim ITC.

3. GST on Digital Books (E-books):

Unlike printed books, digital books or e-books are subject to GST at a rate of 5%. This means vendors will charge 5% GST on the sale of e-books.

4. Input Tax Credit (ITC) on Digital Books:

When a company purchases e-books for employee training and the vendor charges GST, the company is eligible to claim Input Tax Credit (ITC) on the GST paid. However, it’s crucial to ensure the following conditions are met:

• Business Use: The e-books must be used in the course or furtherance of the business.
• Other ITC Conditions: All other standard conditions for claiming ITC, such as having a valid tax invoice, must be fulfilled.

In Summary:

• Printed Books: Exempt from GST; No ITC applicable.
• E-books: 5% GST applicable; ITC can be claimed if conditions are met.

Important Note: GST laws and regulations are subject to change. It’s always advisable to consult with a tax professional for the most up-to-date information and specific guidance related to your business.