In this article, you can quickly check out the list of goods and services that are not eligible for an input tax credit as per the GST Act, 2017.
Introduction of ITC
Input tax credit is considered very significant for every business unit which is always in the need to invest in the business in the manner of capital. The need for capital is required each and every time a business gets ready for its next project. This time in GST, a business unit will be eligible for the input tax credit, only if certain cases are met with the transactions.
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Invoice matching of both parties will be the key issue for checking and granting the input tax credit to the dealer while in certain cases, the input tax credit may not be available for some rules and regulation purposes.
Some of the Goods and Services Which are Not Eligible for ITC
Read Also: Input Tax Credit Guide Under GST: Calculation with Proper Examples
| S.No. | Items | Exceptions |
|---|---|---|
| 1 | Motor Vehicles | Except in cases: “Extended supply of such vehicles or conveyances;” “Transportation of passengers” |
| 2 | Other Conveyances | “Providing training on driving, navigating such vehicles” “Conveyances for transportation of goods” “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.” |
| 3 | Insurance, repairs and maintenance for motor vehicles and conveyance are not allowed | “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 in a Health Centre | “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.” |
| 5 | Membership of a Club, | – |
| 6 | Membership in a Fitness Centre; | – |
| 7 | Works contract services when supplied for the construction of an immovable property | – |
| 7 | Rent-a-cab, Life Insurance, Health Insurance | “Gifts to employees are exempted from GST up to a value of Rs 50,000 per employee – Schedule I of CGST Act, 2017 (Refer Sec 7)” |
| 8 | Travel benefits extended to employees on vacation such as leave | – |
| 9 | Travel benefits on home travel concession (LTA) | – |
| 11 | “Except where it is an input service for the extended supply of works contract service and plant and machinery” | Goods or services or both received by a taxable person for the construction of an immovable property |
| 12 | “Gifts to employees is exempted from GST up to a value of Rs 50,000 per employee – Schedule I of CGST Act, 2017 (Refer Sec 7)” | “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” |
| 13 | Goods or services or both on which tax has been paid under section 10; | ie. Under section 10 composition scheme |
| 14 | Goods or services or both received by a non-resident taxable person | “Except on goods imported by him” |
| 15 | Goods or services or both used for personal consumption | – |
| 16 | Goods lost | – |
| 17 | Goods written off | – |
| 18 | Goods destroyed | – |
| 19 | Goods stolen | – |
| 20 | Goods disposed of by way of gift or free samples | “Gifts to employees are exempted from GST up to a value of Rs 50,000 per employee – Schedule I of CGST Act, 2017 (Refer Sec 7)” |
| 21 | Any tax paid in accordance with the provisions of sections 74, 129 and 130. | I.e. In Fraud, Misstatement, etc. |
Sir, I am a proprietor of the firm, I had borrowed unsecured loans from friends and relatives, and provide interest to them, as I am registered in GST, shall I have to charge GST no interest paid to my unsecured loans….please let me know…wating for your reply
No GST is not charged on interest by way of loans as it is exempted
Sir, as I can avail input credit on car insurance, can I claim GST paid on my life insurance, as I am the proprietor of business.. if I died business closed … so please reply
No input tax credit cannot be claimed even in case of car insurance nor in case of life insurance.
Hello Sir,
We are a manufacturing and export business entity, can we take the inputs on a generator purchase which used in our manufacturing process in the firm.?
If yes,
please specify the section and subsection in this regards in the CGST ACT or IGST ACT or UPGST ACT or Notification and circular and rules etc.
Best Regards
M.A. Khan
Yes, input tax credit can be availed. Please refer Section 16 of CGST Act, 2017.
Sir, we purchased Overhead crane for our factory in (GST Regime). I want to know is overhead crane capital goods? & we have taken all GST Credit is it correct?
If you have capitalized such overhead crane in your books then it shall be capital goods and GST credit in full shall be available in the year of purchase only.
DEAR SIR, I AM A GOVERNMENT WORK CONTRACTOR. AGAINST GOVERNMENT DEPARTMENT TENDERS(LIKE P.W.D.) I BUILT ROAD,BUILDING ETC. FOR THEM TO PUBLIC USE. CAN I AVAIL ITC ON PURCHASE LIKE CEMENT STONE GRIT ETC?
No ITC cannot be availed as No ITC is available in case work contract services when supplied for construction of immovable property except when it is input service for the further supply of work contract services.
Sir,
Your reply appears to be incorrect.
The input tax credit shall be available to the contractor who himself is undertaking works contract service, as he is using these inputs for further supply of works contract service.
Please revisit and clarify.
Thanks
Can I avail GST Input credit on the purchase of crockery material for hotel banquet hall on which paying GST @18 % on hall rent?
Yes, input tax credit can be availed.
Dear Sir,
We are a registered dealer of two-wheeler bikes if we purchased COFFE MACHINE for our showroom, can we claim ITC credit
Yes, ITC can be claimed.
Sir,
we are an authorized dealer of two-wheeler bikes if we bought AC for our showroom, can we claim ITC credit
Yes, ITC can be claimed.
Dear Sir,
Please kindly clarify packing materials for the jewellery sector (eg. ring box, coin box, chain pouch, bags, trolly, travelling bags, ladies bags. ertc.) GST can we take ITC?
thanks
Yes, ITC can be availed in used in course of business.
Sir,
We are a Building Material Supplier. Can we take ITC credit from purchase building material gst rate 5% and we will sale those material to our client.
As per section 17 (5), ITC would not be allowed on inputs for construction of immovable property.
Sir,
If I got the service contract at our Delhi GSTN address and I bill to my client (register in UP) from Delhi GSTN. but work of place is in Uttar pradesh.
I received hydra service from subcontractor (he is in registered in UP) for work in Client establishment in up. Now subcontractor is billing to me in Delhi GSTN No., I want to know that can we take the ITC in Delhi GSTN.
Kindly clarify.
Thanks
If you have also taken registration of UP place from where services are being offered, then you can claim ITC for that in UP only i.e. as CGST and SGST would be applicable so that will not be eligible to be set off from Delhi.
FMCG Products eligible as Input, If I am retailers of Medicine and FMCG Products (Fast Moving Consumer Products like toothpaste, Hair Oil, Fairness Creme etc?
Yes, you can avail the credit.
Dear sir, I have purchased a truck for carrying of trading goods , can i availed ITC , if yes can i claim full ITC amount one time or calculate proportionate basis
If the supplied goods are taxable, the whole ITC on capital goods can be claimed in the first year.
However, if the supplied goods include both taxable and exempt supplies, proportionate credit will be available in 5 installments.
Dear Sir,
We are from Construction Company, it is possible to get GST Input Tax Credit for those employees in Tour & Travelling while they are staying in Lodge. The Bill with GST that we are paying in the name of Company (CGST & SGST)
If the bill is in the name of company input tax credit can be availed but if these services are used in the construction of immovable property ITC cannot be availed.
sir if we are a trader of bedsheet blanket etc can take ITC on a bike and car repairing
ITC of the bike and car repair is not eligible as the same is restricted under section 17(5) of CGST Act, 2017
Sir, We are in the business of construction. We have purchased the truck for transportation of materials. Whether we can get the credit of GST paid on the truck.
In case motor vehicle is used for transportation of goods ITC of the same shall be allowed but if such motor vehicle is used for the construction of immovable property then ITC of the same shall not be allowed. So if the truck is used for the construction of immovable property ITC shall not be allowed.
I have Business to Manufacturing of Food & Beverages and recently I purchased one machinery for production of beverages, Can I get input tax on that purchase of machinery?
Yes, input tax credit for machinery shall be available even it is for tea and beverages. Input tax credit of tea and beverages is ineligible u/s 17(5) of CGST Act, 2017.
Dear Sir,
will you pl advice on the below items for availing ITC for Manufacturing company;
1) Safety goggles, gloves etc
2) Civil materials such as Wash basin, door hinges, closures, aldrops
3) tyres, tubes for tractors, fork lift etc
4) castor wheels
ITC of all the items shall be available to you if these are not used for the construction of immovable property. Goods or services which are used for the construction of immovable property are not eligible for ITC.
SIR, WE ARE BUILDING A HOTEL AT OUR OWN, WE PURCHASED A GENERATOR FOR FUTURE USE, CAN WE TAKE ITC ON PURCHASE OF GENERATOR, OUR COMMERCIAL SALE IS NOT STARTED YET.
In case of construction of building ITC cannot be availed
Sir, We are a manufacturer of automobile components can we take input GST for Transition audit done.
Yes, input tax credit can be availed for such expense.
Dear Sir,
I have some doubt about the GST purchase, Our firm is Manufacture Granite and could I claim Electrical items? For Ex: Tube light, Multimeter, LED bulb etc.
Input tax credit for electrical items can be claimed as they are used in making taxable supplies of granite.
SIR, WE ARE A TRADER. WE ARE PLANNING TO BUY A WAREHOUSE TO STORE OUR TRADED GOODS. CAN I AVAIL THE GST INPUT PAID TO THE BUILDER FOR THE PURCHASE OF THE WAREHOUSE?
Yes, you can avail the credit of taxes paid to the builder for the purchase of warehouse.
Dear Sir,
We are manufactures of Alloy & Non-alloy steels Can we claim ITC on the purchase of Steels like Angels, beams, Chequer plates etc. whether eligible for ITC if the purchases of both capital & revenue expenditure.. please clarify.
Thanks
Can I claim ITC on Code 998314? Your software License renewal Fee.
Yes, you can claim ITC on it.
Dear Sir,
Can we AVAIL ITC ON A/c capacitor for office use?
Yes, you can avail ITC on A/C capacitor for office use.
We provide food to our employee & so we purchase lots of groceries in a GST billed store. Cant I claim the returns?
No, ITC on food and beverages cannot be claimed.
Dear Sir
Shall we claim input credit on rental uniforms which are provided to our staff?
YES , YOU CAN CLAIM ITC ON RENTAL UNIFORMS PROVIDED TO STAFF.
Hello.
Can I get input credit on the purchase of steel angles and plywood and other materials for manufacturing steel tables, partitions and other furniture for my plant and office building?
You can claim credit.
My business is based in Rajkot. I import packaging machines from Taiwan. Once my container is de-stuffed at Nhava Sheva port, If I supply some machines directly to our Bombay dealer, and dealer’s machines are transported from the port to his godown (around 40 km), do I need to generate an E waybill for that? If yes, how to generate as movement is intrastate and my invoice charges IGST. And first of all, as I am not registered under GST in Maharashtra, can I sale directly in this way?
We have own vehicle given for Hire we can claim GST 5% or not, customer giving the GST Invoice and GST Number.
Sri,
I have purchased a car for own use, can I take ITC claim on GST?
No ITC shall be allowed on motor vehicles whether used for personal or business purpose in case of general businesses. It shall be allowed only in the case where the vehicles are purchased for further selling or used for transportation services i.e. for business purposes.
Whether ITC can be availed on firefighting vehicles?
itc on fire fighting vehicle expenses
FREIGHT PAID ON OUTWARD SUPPLIES UNDER RCM, IF FREIGHT PAID ON RCM BASIS ARE WE ELIGIBLE TO TAKE INPUT TAX CREDIT GST PAID ON SALES -OUTWARD. PLS GIVE YOUR KIND ADVICE. THANKS IN ADVANCE.
As you have paid tax under RCM, you can avail ITC for such amount paid against output tax liability.
Can we get input credit on inverter battery for office use under GST?
Yes, you can
Sir I claim input credit on computer & a printer or not? Both item of office purpose. Please help.
Yes, you can claim I.T.C. on computer & printer.
DEAR SIR, WE ARE COMMERCIAL RENTAL SERVICE PROVIDE BUILDING UNDER CONSTRUCTION WE HAVE PURCHASED SOME ELECTRICALS ITEM, AC, LIFT ETC. CAN WE CREDIT BOOKED?
You can avail ITC.
Sir,
In the machine uses different types of HSN parts, if main parts of the machine are called 8422 HSN, then its subparts others also known as the same HSN?
is Oxygen gas used in our factory available for ITC or Not in GST?
Sir, I have stone crusher (road metal) than I used labours for taking material from hills. I took labour bill with GST tax. Now I can take input on labour bill.
Thanking sir,
Yes, you can claim ITC on that bill.
Sir,
I am having canteen services in industries & supplying some self-prepared food items to industries so can I claim ITC on grocery items which were purchased for preparing food.
Thanks