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. |
My Company has purchased a mobile phone and TV for business use, can we claim ITC for that.
Yes. The mobile phones/ laptops would be covered under the definition of ‘inputs’ as they are used in the course/ furtherance of business and hence, the input tax paid on such goods will be available as an input tax credit.
Can we take the input tax credit on “Office Maintenance Bill” (Plumbing Work in the office building) under the GST act?
No ITC is available for the activities such as construction, reconstruction, renovation, addition, alteration or repair of an immovable property even it is under the furtherance of business as per the law
Input on works contract service can be used to the extent it is not capitalized. here you are making an error .
Yes you can take the ITC of office Building if you do not capitalize such amount means debit the whole expense in p&L account.
SIR,
CAN WE CLAIMED INPUT TX CREDIT GST PURCHASE ON FACTORY BUILDING RENOVATION
In general, the input tax credit is not available for construction, reconstruction, renovation, addition, alteration or repair of an immovable property even when such goods or services or both are used in the course or furtherance of business.
Can we avail input tax credit on GST of the hotel stay foods@18%?
ITC on Outstation Hotel Stays. For businesses, availing accommodation in destinations outside the State where they are registered is common. … When a business avails accommodation service from a hotel, the place of supply will always be ‘the place where the service is provided’, that is, the location of the hotel.
I have taken a hotel on lease for the past 3 years. I have been giving the GST on the lease amount accordingly. Sin due to covid 19 business has been shotdown. Though I was claiming the ITC. Now my question is can I get the refund of ITC.
NO , refund of ITC is availabe, except inverted duty structure.
I am in the hotel industry. If I am purchasing a motor car with a taxi number. Can I claim for a tax credit of GST?
“The Government has taken restricted meaning of the phrase “in respect of” in recent clarification and has clarified that the GST paid on insurance and repair on vehicles is allowed when the vehicle is used for business purpose only”