Claim of Ineligible ITC-Sec 17(5)

This query is : Resolved

E.KALAIKOVAN (Querist)
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03 September 2025 My friend is running oil trade business and purchased a car & used it for business purpose. Hence he availed ITC from purchase of Car in FY 2021-22. Now DRC-01 notice received to reverse the ITC availed on car u/s 17(5) blocked credit. Interest and penalty for the same.

Four seating capacity car. Car is used for business purpose, some time used for transport of goods also. ECL balance is less than Interest payable amount. Is there any chance to avoid the reversal of ITC and interest.

Please guide. Thanks a lot

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)
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03 September 2025 Blocked under section 17(5) so reverse ITC with interest, if ITC not utilized in terms of rule 88B then you can avoid interest.

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