Block Credit Under GST – Section 17(5) of CGST Act, 2017

Supplies on which Input Tax Credit is not allowed.

List of Block Credit

  • Motor cycles and other conveyances
    ITC is available on motor cycles and other conveyances only when they are used for making the following taxable supplies
  1. Further supply of such vehicles or conveyances
  2. Transportation of passengers
  3. Imparting training on driving, flying, navigating such vehicles or conveyances
    So, apart from the exceptions, ITC cannot be availed on purchase of motor cycles and other conveyance. ITC can be availed when these are used for transportation of goods for either self or some other recipient.
  • Specific goods and / or services or both
    ITC will not be available to a registered person for the following receipt of goods or availment of services or both:
  1. Food and beverages
  2. Outdoor catering services
  3. Beauty treatment
  4. Health services
  5. Cosmetic and plastic surgery services
    ITC will be available on the above when an inward supply of goods and / or services or both of the abovementioned categories is used for making an outward taxable supply of goods and/or services or both or as an element of taxable composite or mixed supply
  • Membership of a club, health and fitness centre
    ITC cannot be availed on tax paid for membership of club, health and fitness centre under any circumstances. This restriction is absolute, and there is no exception.
  • Rent cab, health insurance, life insurance: ITC shall not be available to registered persons on renting a cab, life and health insurance supplies received by it. This restriction is not absolute. ITC will be available where the government notifies the services which are obligatory for an employer to provide to his employees for the time being in force. Also, where such an inward supply of goods and services or both of a particular category is used by a registered person to make an outward taxable supply of the same category, or when it is used as a part of composite mixed supply, ITC is allowed. Also, The ITC on the supply of above services is allowed when it is paid on account of travel benefits extended to employees on vacation such as leave travel concession
  • Works contract services when supplied for construction of immovable property: ITC not available to a registered person for the tax paid on the inward supply of works contract services used for the construction of immovable property. This is not applicable to the construction of plant and machinery. Where it is input used for further supplying of a works contract service, ITC is available.
  • Goods and / or services or both on which tax has been paid u/s 10
  • Goods and / or services or both received by a non-resident taxable person except on goods imported by him
  • Goods or services or both used for personal consumption
  • Goods lost, stolen, destroyed, written off or disposed off by way of gift or free samples.
  • ITC shall not be available to a registered person on any tax paid by the provisions of section 74, 129 and 130.

 

Kind Regards
CMA Sandeep Kumar
Founder - CMA CLUB INDIA
+91-9311210010 / 9868600010