A brief list where input tax credit under GST is not available (Section 17(5))

There are some cases where there is no input available under GST to the applicant and there are some exceptions to this, hence to know more about this please read carefully the whole article.

1. Motor Vehicle and other conveyance / Vessel and Aircraft

a. Blocked Credit

Input tax credit not available on motor vehicle and any other conveyance to transport persons, having seating capacity not more than 13 persons (including the driver) including leasing, renting or hiring thereof.

And also, not available on Vessel and Aircraft including leasing, renting or hiring thereof.

Services of general insurance, servicing, repair & maintenance on such motor vehicle and other conveyance or Vessel and Aircraft.

b. Exception (means ITC available on the followings)

When Such Motor Vehicle and other conveyance or Vessel and Aircraft used for

i. Further supply

ii. Transportation of passengers

iii. Imparting training on driving of such motor vehicle

iv. Imparting training on navigating / flying such vessels or aircraft

v. Transportation of Goods

ITC would further be admissible for leasing, renting or hiring of motor vehicles when such motor vehicles are used for above said purposes or where the recipient is engaged in the manufacture of such motor vehicles or Vessels / Aircrafts or in the supply of general insurance services in respect of such motor vehicles or Vessels / Aircraft insured by him.

2. Supply of Food & beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery.

a. Blocked credit

Generally, no ITC available

b. Exception (means ITC available on the followings)

ITC would be available when inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply

ITC would be admissible where it is obligatory for an employer to provide such supplies to its employees under any law for the time being in force.

3. Memberships of club, health and fitness center

a. Blocked credit

No ITC available

4. Rent a cab, life insurance and health insurance

a. Blocked credit

Generally, no ITC available

b. Exception (means ITC available on the followings)

The Government notifies the services which are obligatory for an employer to provide to its employees under any law for the time being in force; or

such inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as part of a taxable composite or mixed supply.

5. Travel benefits extended to employees on vacation such as leave or home travel concession

a. Blocked credit

No ITC available

6. Works contract services when supplied for construction of an immovable property (other than plant and machinery)

a. Blocked credit

Generally, No ITC available

b. Exception (means ITC available on the followings)

Where it is an input service for further supply of works contract service.

7. Goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business

a. Blocked credit

No ITC available

8. Goods or services or both on which tax has been paid under section 10 i.e. Composition Scheme

a. Blocked credit

No ITC available

9. Goods or services or both received by a non-resident taxable person

a. Blocked credit

Generally, No ITC available

b. Exception (means ITC available on the followings)

ITC available on goods imported by him.

10. Goods or services or both used for personal consumption

a. Blocked credit

No ITC available 

11. Goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples

a. Blocked credit

No ITC available 

12. Any tax paid in accordance with the provisions of sections 74, 129 and 130 (Fraud cases)

a. Blocked credit

No ITC available

*Section 74:

Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud or any willful misstatement or suppression of facts.

*Section 129

Detention, seizure and release of goods and conveyances in transit.

*Section 130

Confiscation of goods or conveyances and levy of penalty

Author Bio

Qualification: CA in Practice
Company: Ankit Mahendra & Associates
Location: Lalitpur, Uttar Pradesh, IN
Member Since: 13 Jul 2020 | Total Posts: 13
I am qualified chartered accountant, engaged in practice and experience in Income Tax return filing, tax audit, Goods & Services Tax return filing, GST audit, various registration and incorporation etc. View Full Profile

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6 Comments

    1. charteredaccountantjhansi says:

      If you are engaged in work contract and and input service are used for further supply then input on input service can be taken otherwise not.

  1. kashupatel22@gmail.com says:

    Sir,
    I have doubt
    If we purchase capital goods whose seating capacity is more than 13 and which are used in the course or furtherance of business to transport employees from or to factory premises.
    Shall i take input tax credit for the same???

    1. charteredaccountantjhansi says:

      No, you can not take ITC.
      If it is obligatory under any law to pickup and drop off your employees then u can take. For more clarification u can ask me on twitter “cabickey”

      1. kashupatel22@gmail.com says:

        But there is lot of things which is not obligatory than after we are take credits.
        i.e Staff Welfare Expensesw upto 50,000/- we can take ITC.

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