Here is the short answer on GST on corporate gifts in India. If a company gives a gift free of charge, the company usually cannot claim input tax credit (ITC) on what it bought for that gift, because Section 17(5)(h) of the CGST Act blocks credit on goods "disposed of by way of gift". For employees there is one more rule: gifts worth up to ₹50,000 per employee in a financial year are not treated as a supply, so no GST is due on the act of gifting. Gifts above that limit are treated as a supply.
This is general information, not tax advice. GST law changes, and your facts matter, so please confirm your own case with your CA before you file anything.
We are a food company, not tax advisers. HR and admin teams often ask these questions in the festive season, so below, every rule links to the official text so you (and your CA) can check it yourselves.
The four official sources behind the rules
Most of the confusion online comes from blogs quoting other blogs. These are the primary documents:
- CGST Act, Section 17(5)(h). In the list of blocked credits, it includes "goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples". You can read it in the CGST Act text published by CBIC.
- CGST Act, Schedule I, paragraph 2. Schedule I lists activities that count as a supply even without payment. Paragraph 2 covers supplies between related persons made in the course of business, and its proviso says "gifts not exceeding fifty thousand rupees in value in a financial year by an employer to an employee shall not be treated as supply of goods or services or both". Employers and employees are deemed related persons under the Explanation to Section 15. The Act is on India Code, the government's official legislation portal.
- CBIC press release of 10 July 2017 on gifts and perquisites. It confirms that "Gifts upto a value of Rs 50,000/- per year by an employer to his employee are outside the ambit of GST", that gifts above ₹50,000 made without consideration are taxable, and that perquisites given under the employment contract are not subject to GST. See the CBIC press release on gifts.
- CBIC Circular No. 92/11/2019-GST, dated 7 March 2019. It is often quoted as "92/11/2018" because its file number ends in 2018, but the circular itself is 92/11/2019-GST. Para 2(A) says free samples and gifts given without consideration are not a supply (except where Schedule I applies), ITC is not available on inputs used for them, and ITC is available where the gift does fall under Schedule I. Read Circular 92/11/2019-GST on CBIC's site.
Input tax credit on gifts: why it is blocked
GST works on a chain. You pay GST when you buy, and you set it off against GST you charge when you sell. A free gift breaks that chain, because nothing is sold onward. So the law simply says: if the goods leave your business as a gift, the input tax credit on gifts goes too.
In practice, when your company buys 200 hampers for clients, the GST charged by the seller becomes a cost. Your accounts team should not claim it as ITC. If it was already claimed (say the hampers were bought as stock and later given away), your CA will usually advise reversing it.
The one exception is the Schedule I route. If a gift to an employee crosses ₹50,000 in the year, it becomes a supply on which GST is payable, and Circular 92 says ITC is then available on the inputs used for it. That is rare for hampers, but common with gadgets, gold coins or travel.
Gifts vs. items given under the employment contract
This is the distinction most people miss, and it changes the answer.
A gift is voluntary
A Diwali hamper, a work-anniversary voucher or a thank-you box after a big launch is given at the company's discretion. Nobody is entitled to it. These are gifts: up to ₹50,000 per employee per financial year they are not a supply, and the ITC on them is blocked under Section 17(5)(h).
A perquisite is part of the deal
If something is promised in the appointment letter or forms part of cost-to-company, the 10 July 2017 press release says supplies made by an employer to an employee under the contractual agreement are not subject to GST. It is not a "gift" at all. That does not mean ITC becomes available. For food and beverages, Section 17(5)(b) separately blocks credit, with a proviso allowing it only where an employer is obliged to provide the item to employees under a law in force. A festive hamper is very rarely a legal obligation.
So for a food hamper, the practical result is usually the same either way: no output GST to pay, and no ITC to claim. The label matters more for gadgets, memberships and other non-food perks. Your CA should look at your HR policy wording before deciding which side of the line you sit on.
Corporate gift GST rules by scenario
Here is how the corporate gift GST rules play out in common situations. Treat it as a starting point for your CA.
| Scenario | Is it a "supply"? | GST payable on giving it? | Can you claim ITC? | Source |
|---|---|---|---|---|
| Festive hamper to an employee; total gifts to that person stay within ₹50,000 in the financial year | No | No | No, blocked | Schedule I para 2 proviso; Sec 17(5)(h) |
| Gifts to one employee exceed ₹50,000 in the financial year | Yes | Yes, on the gift | Yes, on related inputs | Press release 10 July 2017; Circular 92 para 2(A) |
| Free hampers to clients, dealers or vendors | Generally no (no consideration) | Generally no | No, blocked | Circular 92 para 2(A); Sec 17(5)(h) |
| Free samples to prospects | Generally no | Generally no | No, blocked | Circular 92 para 2(A); Sec 17(5)(h) |
| Food items provided under the employment contract (part of CTC) | Not subject to GST per CBIC | No | Usually no for food, unless a law obliges the employer | Press release 10 July 2017; Sec 17(5)(b) |
Two cautions. The ₹50,000 limit is per employee for the whole financial year, across all gifts, not per occasion. And for clients, "generally" matters: if a client is also a related person or a distinct person (for example, your own branch in another state), Schedule I can apply. That is a CA question.
What the GST rate on a food hamper looks like in 2026
The GST you pay when you buy a hamper depends on what is inside it, item by item. Ladoos, cookies, roasted nuts, coconut chips and a scented candle can each sit under a different HSN code. There is no single "hamper rate".
Rates also changed recently. After the 56th GST Council meeting, the government announced a move to two main rates, 5% and 18%, plus a 40% rate for a few select goods, effective 22 September 2025. The GST Council press release on rate rationalisation lists several packaged foods among the items moved down. Since your ITC on gifts is blocked anyway, this GST is a straight cost, so ask your vendor how the price is built and check the current rate for each item with your CA.
A simple budgeting example
Say you are sending Diwali hampers to 50 employees and 30 clients. Because ITC is blocked, budget on the full price you pay, GST included. Do not plan to "get the GST back".
For employees, keep a simple register of what each person received during the financial year. A ₹1,215 hamper is nowhere near ₹50,000, but if the same employee also gets a phone at an award night and a holiday voucher, the total can cross the limit faster than you think. Our guide on how much to budget per employee for Diwali gifts has realistic ranges.
Where our hampers fit
Our hampers sit at three price points. These are the ones we would suggest for teams and clients:
- Crimson Canopy Reserve Gourmet Client Hamper, ₹1,215: chatpata cashews, coffee cookies, oats and almond bites, and coconut chips. Our suggestion for clients.
- Emerald Canopy Healthy Snack Gift Hamper, ₹745: coconut chips, coffee cookies and peri peri almonds. Good for larger teams.
- Midnight Bloom Grande Premium Gift Hamper, ₹1,605: coconut sugar, almond butterscotch ladoos, Oreo oats cookies, peri peri almonds, coconut chips and coconut millet pops. For senior clients or leadership.
All our hampers contain nuts, so please check for allergies before gifting. The coconut in them comes from our family's ancestral estate in Sindhudurg. You can see the full range in our corporate gift hampers collection. For bulk or custom requirements, share your requirement on WhatsApp at +91 81049 05922 and we'll confirm.
Frequently asked questions
Is there GST on corporate gifts given to clients?
Usually there is no GST to pay on the act of gifting, because a free gift to an unrelated client is generally not a supply. But the company cannot claim ITC on the GST it paid while buying those gifts, under Section 17(5)(h). This is general information, not tax advice, so confirm with your CA.
Is the ₹50,000 limit per gift or per year?
Per employee, per financial year. Schedule I uses the words "in a financial year", so add up everything one employee receives as gifts from April to March.
Can we claim input tax credit on Diwali hampers for employees?
In most cases, no. If the hamper is a gift within the ₹50,000 limit, credit is blocked under Section 17(5)(h), and if it is a contractual perk, food credit is still restricted under Section 17(5)(b) unless a law makes it obligatory.
Does GST on corporate gifts change after the September 2025 rate cuts?
The rules on gifts and ITC did not change; only the rates on many goods did, from 22 September 2025. Check the current rate for each item in your hamper with your CA.
Should we rely on this article to file returns?
No. This is general information, not tax advice, and your CA should review your specific facts, HR policy and invoices before you claim or reverse any credit.
Next step
Share this page with your finance team, decide if your festive boxes are gifts or contractual perks, and then pick hampers that fit the per-head budget. When you are ready, browse our healthy corporate gift hampers and message us on WhatsApp with your numbers.
Written by the Good Graze team, who grow coconuts on our family estate in Sindhudurg and pack every hamper in Navi Mumbai.