What is negative ITC

Under the GST Law, there are some Transaction on which ITC is Ineligible / Blocked. This violates one of the main objective of GST i.e. "Seamless Flow of Credits" in the Economy.

Section 17(5) of the CGST Act 2017 enumerates certain transactions on which Input Tax Credit ( ITC ) is BLOCKED. Such as :

(a). Motor Vehicles having approved seating capacity of 13 Persons ( including the Driver ).

(b). Food & Beverages, Outdoor Catering, Beauty treatment, Health Services, Cosmetic and Plastic Surgery, Life Insurance and Health Insurance

(c). Membership of Club, Health and Fitness Center, and Travel Benefits extended to employees like LTC etc.

(d). Works Contract Services for Construction of an Immovable Property.

(e). Goods or Services or both received by a taxable person for construction of an immovable property ( other than Plant and Machinery ) on his own account.

(f). Composition Scheme Dealers are not eligible to claim ITC.

(g). Goods or Services or both received by a Non Resident Taxable Person.

(h). No ITC shall be available on Goods or Services or both which are being used for "PERSONAL CONSUMPTION."

(i). Goods Lost, Stolen, Destroyed, Written Off or Disposed Off by way of Gifts or Free Samples.

(j). Any Tax paid in accordance with the Provision of Section 74 ( FRAUD CASES ), Section 129 and Section 130.

The Provision of the Law ( Section 17(5) of the CGST Act 2017 ) has been explained in a simple manner in my comment. Kindly refer the Provision of Section 17(5) of the CGST Act 2017 for more information.

Thanks sir 👍 🙏🙏🙏🙏
only section 17 of CGST Act pertaining to not eligible for ITC, however another Section regarding negative ITC

Sir only Section 17(5) of the CGST Act 2017 deals with the BLOCKED CREDIT Concept. In future there might be some amendment in the GST Law regarding this ITC matter.

Thanks 🙏🙏🙏

Your most Welcome Sir...

Section 17 of the cgst act 2017, also restrict credit which are of personal nature.