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.

Author Bio

Qualification: CA in Job / Business
Company: GTPL Hathway Ltd (Listed Entity)
Location: Ahmedabad, Gujarat, India
Member Since: 11 May 2021 | Total Posts: 2
I am having 4 years of Experience in Direct & Indirect Taxes, I have worked with CA Firm, Pvt Ltd Company and Listed company based in Ahmedabad. View Full Profile

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