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. |
Is it possible to avail input tax credit on lease rental property?
Yes, you can avail ITC of the tax paid on lease rentals.
When we are Constructing Hotel Project and executed Works contract , Building Material , Gardening and Landscaping , Installing Lifts , Plant and Machinery, Kitchen Equipment , Cutlery and Glassware, Furniture, Bedding , Electrical Equipment and DG set,,Lighting and Fittings, Painting, Interior Decoration,Security Equipment, Computer Equipment, Printing and Stationery , Professional ,Legal , Audit Fees where we have paid CST or VAT or Excise Duty or Service tax or Octroi or Cess as applicable prior to 1.7.2017 and after 1.7.2017 GST is applicable. How do we claim ITC under TRAN 1 or GSTR 3B please explain?
As of now the facility to avail credit under TRAN-1 is not available as the form is closed from 27/12/2017 on GST portal. Any unutilized credit of eligible duties & taxes can now not be availed through GSTR-3B as only it can be carried forward by filling TRAN-1.
Can we get input credit on stationery items for office use under GST?
Yes, you can get input credit.
yes, you can avail ITC as the same for the furtherance of business.
Our Organisation is providing Health care services (Hospital, Optical & pharmacy) so could you please clarify regarding GST input, like can we claim input for Travelling Charges incurred for Business, Conveyance charges, Marketing expenses like Camp etc, Incentives to Employees for target completion etc?
Since health care services are exempt from GST, therefore, no credit will be allowed.
Unlike Excise Law, GST Law provides for ITC on the supply of all goods and services including e.g. furniture, stationery etc. How is it possible to comply with Section 17(2) of CGST Act, where you are also supplying exempt goods.