List of Goods and Services on which GST ITC is not available

Rohit Kumar Singh , Last updated: 18 March 2024
Share

Budget 2023 updates

An amendment has been made to Section 17(5) of the tax regulations to prohibit corporates from claiming Input Tax Credit on Corporate Social Responsibility expenditure.
Transactions such as high sea sales, which are neither classified as the supply of goods nor services and are exempt, will now be considered for proportional Input Tax Credit calculation as per the revised Section 17(3). This means that businesses can claim a portion of the ITC related to such transactions.

List of Ineligible Items on which ITC is not allowed under GST Laws

For a taxpayer, it is essential to determine whether the tax paid on the inward supplies is eligible as Input Tax Credit (ITC) or shall fall within the ambit of ineligible ITC. Section 17(5) of CGST Act 2017 provides for cases wherein a taxpayer would not be entitled to claim ITC unless it falls within the exceptions as provided.

In this relevance, list of Goods & Services falling within the ambit of Blocked Credit as per Sec. 17(5) of CGST Act 2017 has been chalked out mapping the same with applicable HSN / SAC tariff heading below:

Sl. No.	Category of goods & services	HSN / SAC	Exceptions where ITC is allowed
1	Motor Vehicles & Other Conveyances	87	Further supply of such vehicles or conveyances; or Transportation of passengers; or Providing training on driving, navigating such vehicles; or Conveyances for transportation of goods; or Motor vehicles for transportation of persons having an approved capacity of more than thirteen persons including driver when they are used for business purposes; Buses for pick and drop of employees (if approved capacity is more than 13 persons including driver) – part of above.
2	Insurance, repairs and maintenance for motor vehicles and conveyance not allowed	997134, 998714,	Only allowed under this head if ITC on vehicles are allowed; If the ITC on any type of vehicle is not allowed, then the cost of insurance, repairs and maintenance for such vehicles is also not allowed.
3	Food & Beverages, Outdoor Catering, Beauty Treatment, Health Services Cosmetic, Plastic Surgery	99633 99972 99931, 99932, 99933, 99934, 99935	Except where an inward supply of goods or services or both of a particular category is consumed 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 is available in respect of food and beverages or health services where the provision of such goods or services is obligatory for an employer to provide to employees under any law for time being in force.
4	Membership of a Club, Health and Fitness Centre	99972	–
5	Rent-a-cab, Life Insurance & Health Insurance	996601 997132, 997133 997141, 997142	The Government notifies the services which are mandatory for an employer to provide to its employees under any law for the time being in force; or
5	Rent-a-cab, Life Insurance & Health Insurance	996601 997132, 997133 997141, 997142	Such inward supply of goods or services of a particular category is used for making an outward taxable supply of the same Category of goods or services or as part of a taxable composite or mixed supply.

Sl. No.	Category of goods & services	Goods & Services HSN / SAC	Exceptions where ITC is allowed
6	Travel benefits extended to employees on vacation	NA	–
7	Travel benefits on home travel concession (LTA)	NA	–
8	Works contract services when supplied for construction of an immovable property	9954	Except where it is an input service for further supply of works contract service and plant and machinery
9	Goods or services received by a taxable person for construction of an immovable property	9954	Except goods or services received on his own account including when such goods or services or both are used in the course or furtherance of business and plant and machinery
10	Goods or services on which tax has been paid under section 10 (Composition Scheme)	NA	–
11	Goods or services or both received by a non-resident taxable person	NA	Except on goods imported by him
12	Goods or services or both used for personal consumption	NA	–
13	Goods lost, written off, destroyed or damaged or stolen	NA	–
14	Goods disposed of by way of gift or free samples	NA	Gifts to employees is exempted from GST upto a value of Rs 50,000 per employee – Schedule I of CGST Act, 2017 (Refer Sec 7)
15	Any tax paid in U/Sec 74, 129 and 130. (i.e. in fraud, misstatement, etc.)	NA	–