The recent ruling by the Karnataka Authority for Advance Ruling (AAR) has stated that incentives in the form of gold, other assets, or even gift hampers may attract GST under the Goods and Services Tax (GST) regime.

This is because such incentives can be considered as a "permanent transfer or disposal of business assets" where input tax credit (ITC) has been availed on such assets. The AAR ruling is based on the following provisions of the GST Act:

Section 7(1)(c): This section defines "supply" to include "permanent transfer or disposal of business assets". Section 17(5)(h): This section states that ITC is not available on the "permanent transfer or disposal of business assets" where ITC has been availed on such assets.