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Article explains GST Provision related to Blocked Credit under section 17(5) of CGST Act 2017 on Supply of Goods /Service involved, Insurance of Motor Vehicle including motor cycle, Cost of Motor Vehicle, Servicing of Motor Vehicle, Life Insurance/health insurance of Worker & office Staff, Food & Beverages, Works contract service & Goods & Service for construction of immovable property, Goods written off in the books of accounts, Providing Canteen facilities to Employees & Staff and Goods accounted in the books of accounts.
Blocked Credit
| Sr No | Nature of transaction | Supply of Goods /Service involved. | Reason for non- availability of Credit | Explanation of section -17(5) | Remarks |
| 1. | Insurance Expenses | Insurance of Motor Vehicle including motor cycle | Block credit U/s 17(5)(ab) of CGST Act 2017. | Motor Vehicle having approved seating capacity not more than 13 | Insurance related to Vehicle (having approved seating capacity more than 13) will be available |
| 2. | Motor Car & Motor Vehicle | Cost of Motor Vehicle | Block credit U/s 17(5)(ab) of CGST Act 2017. | Motor Vehicle having approved seating capacity not more than 13 | GST on Cost of Vehicle (having approved seating capacity ) will be available. |
| 3. | Repairs & maintenance | Servicing of Motor Vehicle | Block credit U/s 17(5)(ab) of CGST Act 2017. | Motor Vehicle having approved seating capacity not more than 13 | Service related to Vehicle ( having approved seating capacity ) will be available |
| 4. | Staff Welfare | Life Insurance/health insurance of Worker & office Staff | Block credit U/s 17(5) of CGST Act 2017(g) | Life Insurance Services used for personal consumption. | Credit of such insurance service will be available if Insurance to be taken compulsory under any act. |
| 5. | Lodging & Boarding Expenses & Hotel Expenses | Food & Beverages | Block credit U/s 17(5) of CGST Act 2017(b) | Goods & Service in relation to food beverages | To avail credit other than food beverages Like hotel stay we have to take different invoice for different services |
| 6. | Building & Factory Building | Works contract service & Goods & Service for construction of immovable property. | Block credit U/s 17(5) of CGST Act 2017(c) | Works contract service in relation to construction of an immovable property other than plant & machinery except where it is an input service for further supply of works contract service. | Works contract service for construction of plant & machinery and support Structure for fixing of such plant & machinery will be eligible for ITC. |
| 7. | Goods destroyed, Stolen, written off, lost | Goods written off in the books of accounts. | Block credit U/s 17(5)(h) of CGST Act 2017 | Goods written off in the books of account either as a raw material, Semi finished goods or finished goods then ITC of inputs and input services used for manufacturing is not available. | ITC need to be reversed at the time when goods written off in the books of accounts. |
| 8 | Canteen Expenses | Providing Canteen facilities to Employees & Staff | As per notification 46/2017 who charge GST @ 5% on outward supply. | If we pay GST @ 12% on outward supply we can take credit of input & input services used in providing canteen services. | |
| 9 | Goods given as gift or free samples. | Goods accounted in the books of accounts. | Block credit U/s 17(5)(h) of CGST Act 2017. | Goods accounted in the books of account as free samples or gift then proportionate reversal of ITC is required. | ITC need to be reversed at the time when goods accounted in the books of accounts. |
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