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,
Whether ITC could be availed on Vendor providing Milk and Tea Services at Factories, Guest House Groceries items purchased, Drinking water and Cabs/Taxi Service used for business visits/business purpose, etc.
Yes
Sir
we have a manufacturing unit & we open new cc account in bank & Bank raised loan processing, legal fees bill including GST amt. Can we claim this gst amt for manufacturing business?
“According to specific provisions under GST law, a statement issued by a bank can be treated as a tax invoice. Accordingly, you should be eligible to claim the input tax credit, based on a statement issued by the bank, as long as it contains all the prescribed particulars, including your GST registration number”
12.07.2020
Sir.,
Can we take GST ITC on Security service charges as per below actual bill working:
Billno.1/30.04.2020
Security service charges (2 security for office purpose) Rs.10000/-(Taxable value)
Add:CGST 9% 900
SGST 9% 900
Total bill amount 11800
(NB: GST amount is included in the above bill and not on reverse charge mechnism)
Please reply
Thanks and regards
K.RENGARAJAN
Yes, the mechanism is correct
Can I claim an ITC on GST paid for the paper plate making machine
If it is used for business purpose then only you can claim the same
yes, one can claim INPUT TAX CREDIT on the capital goods.
Yes
One can claim the input tax credit on the capital goods which is not for business use like use as fixed assets in the trust name in the invoice. Trust is registered under GSTIN. Actually Air conditioner use in the Guest House in which guest stayed.
It is treated as ineligible ITC as this is used for non-business purpose
Can we claim ITC on the cement used for making foundation and structural support to plant and machinery?
A -class eng, certificate is required for proper ITC Claim on foundation