Is 5% GST eligible ITC?

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This query is : Resolved

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A user inquired whether the 5% GST shown on their business flight invoice is eligible for Input Tax Credit (ITC), as their GSTR2B indicated it was. Experts confirmed that ITC is indeed available for business travel expenses, regardless of the 5% GST rate. However, it was also advised that taxpayers should always verify ITC eligibility against Section 17(5) of the GST provisions, even if it appears in GSTR2B, to avoid claiming ineligible credit.

Raj Sinha

Raj Sinha (Querist)
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08 June 2021 Hello experts,

I took a flight for business purpose in April. Airline invoice shows Rs.4300+5% (SGST/CGST). My April GSTR2B shows this entry under eligible ITC. I however remember someone telling me that 5% GST cannot be claimed as ITC. How true is this? Under what circumstances can I claim 5% GST as eligible ITC?

Thank you in advance.

Raj

CA Altamush Zafar

CA Altamush Zafar (Expert)
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08 June 2021 ITC is available on such travel

Raj Sinha

Raj Sinha (Querist)
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08 June 2021 Okay. The specific point that I need clarification for is - "Can I claim all 5% GST as eligible ITC?"

Is there any restriction when claiming ITC for 5% GST?
In other words, when can I not claim the 5% GST as ITC?

Gokul Sharma

Gokul Sharma (Expert)
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08 June 2021 ITC should be ineligible as personal nature exp.

CA Altamush Zafar

CA Altamush Zafar (Expert)
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08 June 2021 If it is in the course of business travel ITC available. No restrictions. You can claim ITC

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Raj Sinha

Raj Sinha (Querist)
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08 June 2021 Gokul ji, it was for business purpose. I traveled for a client meeting.

Raj Sinha

Raj Sinha (Querist)
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08 June 2021 Altamush ji, thank you. Yes the travel was purely for business reason.

A follow-up question that I have is, if somethings shows up in my GSTR2B or gets auto-populated in GSTR3B under eligible ITC, can I safely take credit of that? Or do I have to again check if it contains ineligible items (Blocked ITC under GST – Section 17(5))?

CA Altamush Zafar

CA Altamush Zafar (Expert)
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08 June 2021 You will have to check the provisions of section 17 before taking it.

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Raj Sinha

Raj Sinha (Querist)
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08 June 2021 Got it! Thank you Altamush ji.

CA Altamush Zafar

CA Altamush Zafar (Expert)
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08 June 2021 You are most welcome

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