Blocked Input Tax Credit (ITC) under GST

Under GST, input tax credit shall be allowed for all the goods and services used except those which are specifically blocked under the GST Act. Those category of goods and service are explained in a table format.

Sr. No. Input Tax Credit not allowed for following Goods/Service used Conditions when Input Tax Credit is allowed Examples
1 Purchase of Motor Vehicle and Other Conveyance 1.Further supply of Motor Vehicle or conveyance
2.Used for transportation of goods or passengers
3.Imparting training of driving, flying, navigation
1.Purchase of Motor Vehicle or conveyance by Car Dealer, Car showroom owner
2.Purchase of Motor Vehicle or conveyance by Ola Cabs for transportation of passengers, DTAA courier agency for transportation of goods
3.Purchase of Motor Vehicle or conveyance by Motor driving agencies and Motor driving schools
2 Food, Beverages, Outdoor catering,  beauty treatment, health services, cosmetic and plastic surgery 1. Such goods/services are used for making an outward taxable supply of same category of goods/services.
2.Such goods/services are used as an element of composite or mixed supply
1.Retailer of food store selling MRP packages/packets of foods and beverages can take ITC of the food packets purchased from the distributor
2.Jet Airways providing food during flight journey can take ITC of the Food and Beverages purchased
3.Hotel providing hall room on rent for a conference along with Lunch/Dinner facility can take ITC of Catering services
3 Membership of a club, health and fitness center Not allowed Not allowed
4 Rent-a-cab, life insurance and health insurance 1. Such services are made compulsory by Government to be provided by Employer to Employee under any law
2.Such goods/services are used for making an outward taxable supply of same category of goods/services.
3.Such goods/services are used as an element of composite or mixed supply
1. Employee State Insurance Act mandates insurance of the workers working in Factory. ITC shall be available on GST paid on premium of such insurance
2.Re-insurance service
3.ITC of the cab services used by Hotel for pick up and drop of customers from airport
5 Travel benefits  to employees on vacation such as leave or home travel concession Not allowed Not allowed
6 Works contract services for construction of an immovable property (other than plant and machinery) When Works contract services are used for providing works contract service itself 1. ITC of Works contract services used for plants and machinery is allowed
2.ITC of Works contract services used by builder to construct a building is not allowed.
3.ITC in respect  of bill raised by sub-contractor to the main contractor shall be allowed to the main contractor
7 Goods/Services used for construction of an immovable property (other than plant and machinery) by a registered person on his own account including goods/services used for construction in the course or furtherance of business Not allowed Not allowed
8 Goods/Services on which tax has been paid under section 10 (tax is paid to a person registered under composition scheme) Not allowed Not allowed
9 Goods/Services received by a non-resident taxable person Goods imported by non-resident taxable person 1. US Mfg Inc. carrying on business in India imports goods for manufacturing purpose. ITC of the GST paid on import of goods shall be allowed to US Mfg Inc.
10 Goods/Services used for personal consumption Not allowed 1.GST paid on Air Conditioner purchased for installation in residential premises of the Director/employer/employee
2.GST paid on internet charges used in residential premises of the director/employer/employee
11 Goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples Not allowed Not allowed
12 Tax paid in accordance with the provisions of:

sections 74 – tax paid owing to show cause notice demand,

Section 129 – tax paid during detention & seizure of goods  and

Section 130 – tax paid on confiscation of goods and penalty

Not allowed Not allowed

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