Negative List of Input Tax Credit under GST:

Following expenses we can’t consider as input tax credit under GST.

S.No. Nature of Expenses Exceptions
1 Motor Vehicle Expenses
A) Dealer of Motor Vehicle If Service provider ( S.P.) and service receiver (S.R.), both are belong to same line of business ( Dealing in motor vehicle) , in such a case S.R. can claim ITC.
B) Passenger transportation / training of driver If this services is directly use in providing main service (output service liability), in such a case ITC can claim, in another case we cannot claim this expenses as input.
C) GTA Services Tax Paid under RCM is allowed as input tax credit.
D) Car Hiring Charges
2 Food and beverage If SP and SR both are belong to same line of business, in such a case S.R. can claim ITC.
3 Outdoor catering If SP and SR both are belong to same line of business, in such a case S.R. can claim ITC.
4 Beauty Treatment Services If SP and SR both are belong to same line of business, in such a case S.R. can claim ITC.
5 Health Services If SP and SR both are belong to same line of business, in such a case S.R. can claim ITC.
6 Cosmetic & plastic surgery If SP and SR both are belong to same line of business, in such a case S.R. can claim ITC.
7 Rent a cab services 1. In case of similar line of business, credit is allowed.

2. Where such service is mandatory to provide as per norms of government, credit is allowed.

8 Life Insurance Services 1. In case of similar line of business, credit is allowed.

2. Where such service is mandatory to provide as per norms of government, credit is allowed.

9 Health insurance services 1. In case of similar line of business, credit is allowed.

2. Where such service is mandatory to provide as per norms of government, credit is allowed.

10 Construction services for construction of immovable property If SP and SR both are belong to same line of business, in such a case S.R. can claim ITC.
11 Membership of club, health and fitness club
12 LTA benefit to extend to employees
13 ITC used for self construction building which value (including ITC) is capitalized.

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Qualification: CA in Practice
Company: KEHAR SINGH & ASSOCIATES
Location: Gurgaon, Haryana, IN
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8 responses to “13 expenses on which Input Tax Credit is not available under GST”

  1. Rohini Kumthekar says:

    its article very important and usefull.

  2. CA. Sanjeev Singhal says:

    Work contract service for construction of iimovable property has not been considered in the article. Some other disallowance are also provided n Section 17[5] which has not been taken i to a/c.

  3. Ajay says:

    Very useful… Keep it up Bro.

  4. deepak says:

    can i claim ITC for the new car i purchased on my ompany’s name for comany purposes

  5. deepak says:

    can i take itc on new car i purchased in my company’s name for company usage

    • cakeharsingh25 says:

      No you can not take ITC on purchase of car.
      but if assessee is engaged in the business of motor vehicle, in such a case he can claim input tax credit on purchase of car.

  6. ARPIT G SHAH says:

    IN SECTION 17(5)(a)-Blocked credit, credit of only motor vehicle is blocked, not motor vehicle expenses, so in my opinion gst on motor vehicle expenses like car repairing , insurance etc should be allowed. whether it is correct ?

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