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. |
Can We Claim ITC on Purchase of Tyer for Motor, if Inv is raised on Company’s address
Yes, if the first two condition applicable to it
1- Can we avail ITC on room spray
2- Restroom cleaning materials.
3- Display boards, Notice Board
Yes
There is an amendment in Section 17 of CGST Act, where new clause (ab) in inserted under Subsection 5, providing that GST on insurance, repair & maintenance is not allowed. Kindly help to understand that it is applicable from 1-2-19 or from beginning i.e. 1-7-17? Thanks in Advance
It is applicable from 01/02/2019.
Sir
Can we avail Input credit on GST paid for an insurance premium related to the company for the following items
i.Furniture and fittings,
ii.Electrical fittings,
iii.Registered office buildings
and
charges paid for computer printer toner refill charges
iv. Battery and oil replacement charges for corporate office Generator and Registered office Generator
v.Gst paid on Audit Fees.
Please reply
Thanks and regards
K.Rengarajan
Yes, you can claim ITC on i. ii. iii.
Sir
What about item iv and v?
Please reply
In Case of iv – Yes, In case the purchase is in furtherance of your business, you can utilize the ITC for payment of tax on your taxable outputs & in case of v you cannot take ITC.
Why ITC is not allowed on audit fee?
Please specify the concerned section or rule which is disallowing it.
Thanks in Advance!!!!!
ITC can be claimed on audit fees. There is no restriction. But it has to be claimed on an invoice basis and not on the provision basis. If you are making provision as on 31st March then ITC cannot be claimed in the year of making provision.
Can We Claim ITC on Purchase of Electric motor ?
yes u can