Ineligible ITC as per CGST Act

 Blocked Credit
{Sec.17 (5) of CGST Act, 2017}

ITC is not available in some cases as mentioned in section 17(5) of CGST Act, 2017. Some of them are as follows:

a)   motor vehicles and other conveyances except under specified circumstances.
Exceptions to ITC on Motor Vehicles and Conveyances:-

ITC will be available when the vehicle is used for making taxable supplies by the following:-

·        Further Supply of such vehicles or conveyances, vessels or aircrafts [i.e. if you are in the business of supplying cars then ITC will be available].
·        Transportation of passengers [i.e. if you are providing transportation of passengers then ITC will be allowed on the vehicle purchased].
·        Imparting training on driving, flying, navigating such vehicle or conveyances or vessels or aircrafts, respectively.

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 in the supply of general insurance services in respect of such motor vehicles insured by him.
 
b)   goods and/or services provided in relation to:

1. Food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, except under specified circumstances;
2. Membership of a club, health and fitness center;
3. Rent-a-cab, life insurance, health insurance except where it is obligatory for an employer under any law;
4. Travel benefits extended to employees on vacation such as leave or home travel concession;
   

 
c)    Works contract services when supplied for construction of immovable property, other than plant & machinery, except where it is an input service for further supply of works contract;
 
d)    Goods or services received by a taxable person for construction of immovable property on his own account, other than plant & machinery, even when used in course or furtherance of business;
 
e)   Goods and/or services on which tax has been paid under composition scheme;
 
f)     Goods and/or services used for private or personal consumption, to the extent they are so consumed;
 
g)   Goods lost, stolen, destroyed, written off, gifted, or free samples;
Such goods being not used for providing taxable supplies, the ITC thereon is blocked u/s 17(5).
 
h)   Any tax paid due to short payment on account of fraud, suppression, mis-declaration, seizure, detention.
 
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