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. |
Dear Sir,
We are organising Marketing Meet in 4 Star Hotel in Mumbai with the following budget
1: Staying Charges in 4 Star Hotels: About 25 Rooms: Room Rent Rs. 6000/- + GST (1,50,000/- + GST)
2: Hall Charges for Round Table: Rs. 1,50,000/- + GST
3: Decoration and Presentation Arragement: Rs. 1,50,000/- + GST
4: Food and beverages Charges: Rs: 1,50,000/- + GST
Out of 4 cases declared above where we can avail Input Tax Credit while filing the GST return.
Thanks and Regards
Besides food and beverages charges, you can claim ITC on all other services availed.
Except point 4 you can claim ITC.
We are manufacturer of chemicals. We have constructed new rooms where we unload semi finished chemical for natural crystallization of our chemical and chemical change its state from liquid to solid when it is kept in such rooms. So can it be treated as plant and machinary and can ITC be claimed on construction bills of such rooms built in factory premises.
Secondly, we have bought car before gst law was implemented for our marketing person to meet our business clients and suppliers, So can ITC be availed on this car repair bill, and new tyre bill. Can it be consider as furtherance of business as the marketing person is using it for business travel
Thanks
No, Land and Building cannot be treated as plant and machinery. “Plant and machinery” means apparatus, equipment and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes –
1. Land, building or any other civil structures
2. Telecommunication towers and
3. Pipelines laid outside the factory premises.
Since definition specifically excludes land and building, therefore it cannot be considered as plant and machinery.
ITC on car repairs and new tyres can be claimed since these are not covered under exclusions provided by the law.
We are a manufacturer of chemicals. We have constructed new rooms where we unload semi-finished chemical for natural crystallization of our chemical and chemical change its state from liquid to solid when it is kept in such rooms. So can it be treated as plant and machinery and can ITC be claimed on construction bills of such rooms built in factory premises?
Secondly, we have bought a car before GST law was implemented for our marketing person to meet our business clients and suppliers, So can ITC be availed on this car repair bill, and new tyre bill. Can it be considered as a furtherance of business as the marketing person is using it for business travel
Hi Sir,
Am doing Milk, Ice cream business & GST registered, for supply, I have purchased commercial vehicle a month before, ITC availed for the same … Due to some financial problem, I have decided to sale that vehicle @ cost price
Shall I raise an invoice to the purchaser with GST, Is he is eligible for ITC
Pls clarify
Yes, the invoice has to be raised for selling capital goods with GST. The purchaser can claim ITC on Purchase of Motor Vehicles only if he engaged in any of the following business:
1.Supply of other vehicles or conveyances, vessels or aircraft.
2.Transportation of passengers
3. Imparting training on driving, flying, navigating such vehicle or conveyances or vessels or aircraft, respectively.
4.Transportation of goods
Dear Sir,
We have retail stores in various malls. Malls give us the empty store and we carry out interior works for the beauty of the stores including false ceiling, AC connection, electrical work etc. We can not alter the immovable property given to us. Can we claim input tax on these lease interior works (called civil works only) for setting up the retail store?
Please help, Thanks
No, you cannot as these work not relatable to the furtherance of business directly or indirectly
But these are essential exp to bring the business into existence then why ITC is not allowed?
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
Sir, we have purchase bike tyre can I input claim for GST? Bike registered on self But bill raises for the company name.
If the conveyance is used for business purpose, then you can claim ITC.
yes under repair and maintenance
Can We Claim ITC on Purchase of Air Freshener for Room?
Yes, you can claim ITC on the purchase of Air freshener for Room.
Sir,
We are an authorized dealer of two-wheeler bikes, we renewed software licence key, can we claim ITC credit.
like antivirus or else u can claim
Can we take GST input on the purchase of crockery items for:-
1 office use(staff welfare)
2 business gift
1) As the crockery item is used for office use then GST ITC will be available.
2) If the items are gifted to clients as business promotion, no ITC will be allowed.
yes if u have proper Gst bill then u can, but internal expense like staff welfare is nil rated.
I have contracted with a contractor to provide contract labourers for working in my canteen department for serving food to my employees and other services in that canteen. Could I claim an input tax credit for the tax which I pay to the contractor? Kindly help me with this.
Yes, you can claim.
thanks.
Dear Sir,
I have recently bought a Mercedes Benz car on my firm’s name, and the dealer has given me a car insurance policy where my CGST AND SGST amount is very high, can I claim it as it’s not on my individual name its on my firm name. Please suggest the course of action. and the same way I have paid huge GST on CAR Purchase also so that is also can I claim or not.
No you cannot take ITC of car even if it is in firm’s name.
Sir, We are a textile manufacturing Unit. We Hire Labour Contractor For Packing Of Clothes. The Contractor Gives Us a GST Invoice. Can We Claim GST Input On This?
Yes, GST input can be claimed.
SIR, WE ARE PHARMA MANUFACTURING UNIT
WE HIRE LABOUR CONTRATOR FOR PACKING OF MEDICINE AND INJECTION.
THE CONTRACTOR GIVES US GST INVOICE.
CAN WE CLAIM GST INPUT ON THIS?
Yes, you can claim.
Hi Sir,
I have a query, I am an electronics retailer whose sales LED TV and other goods to customer, I want to buy a Maruti Swift car (motor vehicle) for transportation of LED TV LG and SAMSUNG tv to customer residence as free delivery, so I want to know am i eligible to claim ITC on purchase of motor vehicle? AS I HAVE READ IN GST LAW THAT ITC IS AVAILABLE FOR “TRANSPORTATION OF GOODS” HERE DO NOTE I AM NOT USING TRANSPORT VEHICLE ITS A PASSENGER VEHICLE “MARUTI SWIFT” AND AS MOTOR VEHICLE IN GST HAS SAME MEANING MENTIONED IN MOTOR VEHICLE ACT 1988, SO
I THINK I CAN USE IT TO TRANSPORT GOODS AND CAN ALSO AVAIL ITC ON BUYING A NEW VEHICLE.
IF ITS NO, THEN KINDLY GIVE A VALID REASON.
Why hasn’t anyone replied to this query yet?
No, ITC cannot be claimed in your case. ITC on motor vehicles is available when the registered person uses it for transportation of goods i.e. the person is involved in the business of transportation of goods.
We are one of the manufacturing firms for labours shortage issues we can get labours from the agency. The agency provides the GST Bill. shall we claim the GST?
Does GST on Cement / Steel structures used in the foundation of plant & machinery, constructed ourself, is available as ITC to a manufacturing company in the taxable product business.
Yes, it is available
Sir,
IS GST on repair and insurance of cars is eligible to ITC to a manufacturing company, who uses cars for its business and employees?
Thanks in advance
No, it is not available
YES, AVAILABLE, SECTION 17(5) PUTS RESTRICTION ON VEHICLE PER SE. THERE IS NO RESTRICTION ON REPAIRS & MAINTENANCE.
Sir,
We have taken a building on lease for 20 years. We want to install a passenger lift and put ACs, furniture, LED etc. in this building to further sub-lease to a firm/company for guest house purpose or hotel purpose. Can our firm avail Credit on GST paid on these items from our rent/lease amt. to be received in the future.
Yes, the firm can avail ITC of these items.
Sir, we have formed a new partnership and construct a multipurpose hall for hire. we are eligible for input tax credit. we are purchased electrical items like a/c, furniture like chair, table etc.
No ITC is available on materials used in the construction of immovable property
Can we claim the input tax credit on freight etc
Yes, you can claim.
Dear Sir, our company construct an auditorium (Kalyana Mantapa). A lot of materials like electrical fittings, furniture, building material being purchased. we are eligible for claiming the input tax credit?
No, you cannot claim credit in case of construction of immovable property.
SIR, I AM TRANSPORTER
I HAVE already old 43 trucks and I purchased 2 new trucks with GST charges.
Can I charge 12% GST on my billing party along with 45 nosof trucks or should I have to charge only(2) new trucks for GST charges @12?
in short, those my old trucks are charging as taxable good in freight bill or only newly purchased trucks can be charged for with GST 12%?
All trucks will be charged for GST @ 12% on freight expenses.
Sir,
We are a Government Autonomous Body and paying the GST to Service Providers for hiring Security and Housekeeping Services. We are also paying GST on Rental Income in RCM System.
Can we claim/adjust ITC of service suppliers against Rental Income.
Sir,
We are providing legal services to public and these services are exempted from GST, in this case, can I eligible to take input credit on rent, computer purchase and fees paid on profession….etc…
No, you cannot take as your outward services are exempted.
Could you please clarify regarding GST ITC on the purchase of Computer & Software in the name of Medical store
SIR WE ARE PROVIDING SERVICE FOR MANPOWER RECRUITMENT TO SOME COMPANY AND WE ARE PROPRIETORSHIP FIRM CAN WE CLAIM INPUT CREDIT AGAINST SERVICE RECEIVED FROM NAUKRI.COM WHERE I GST PAID.
Yes, you can claim ITC on same.
Sir, I am a GST registration person under proprietorship business and I paying GST on Medical policy, Can we claim input of CGST and SGST?
No Input is not allowed on health insurance as per Section 17(5) of CGST Act.
If cement destroyed due to rain in transit then whether manufacturer required to reverse credit used in manufacturing u/s 17(5)(h). The manufacturer sends cement to distributor from rail.
Yes, the credit of the same need to be reversed being ineligible u/s 17(5)
Sir, I have a petrol pump, which is non-GST, but oil company collect GST @28% on license renewal fees LFR, can I claim itc,
No, you cannot claim as your output item is non-GST
We have company registered under GST service Transportation of material through Tippers and Tractors etc., only for transportation if purchase of machinery in his firm shall i take ITC and in preparation of Invoice Reverse Charge mechanism paid by consignee how to prepare invoice and E waybill is applicable for transport or not kindly send the reply sir
Yes, you can take ITC for the purchase of machinery as you are involved in the transportation of goods business. If you are registered then normal tax invoice need to be prepared but tax not to be charged on it as recipient shall pay tax on such service. E-way bill shall be applicable if goods are sent by you even if you fall under RCM.
cloth and sweets purchases can u claim under GST input tax
ITC is available for clothes not sweets
Sir CONTRACTION GOODS ELIGIBLE ITC
No
Hello Sir,
Can we claim ITC of our co.’s labor’s accidental insurance?
No
no
Approved
Is ITC applicable to cloths?
Yes
I am a service provider. For manpower services, I bought a two-wheeler in the company name for use filed work of marketing. Can I avail GST on above purchases? Please guide
No ITC of motor vehicle is not available as it is not allowed as per section 17(5)
Hello sir,
I have a manufacturing company, Can I input tax credit on reading glasses?
If such glasses are used in course of business you can avail credit of same.
We are a Chemical Manufacturing unit. We are installing a Passenger Lift in our Factory. Can we avail GST ITC for the same?
Yes, you can avail.
We have a manufacturing plant in Gujarat. We mfg Taxable Goods. We maintain Garden in Factory Premises to keep the Low level of Pollution. Can we avail the CGST & SGST Credit from Gardening Expenses?
Yes, you can avail as such expenses are incurred in the course or furtherance of business.