Are you availing wrong GST credit? It may result into Interest/Penalty Blocked Credits under Section 17(5) GST Act

Every supply of goods and services on which GST has been paid are not eligible for input credit set off against output GST liability. Those input GST you can't claim is called Blocked Input Tax Credit. Kindly refer summarized provisions in relation to Blocked credit as under.

List of Block credit under GST

  • Motor Vehicle for Passenger Transport having approved seating capacity of not more than 13 persons except when used for:
  • 1. Further Supply of Vehicles
    2. Transportation of passenger
    3. Imparting Training on driving motor vehicles
  • Vessel and Aircraft except when used for:
  • 1. Further Supply of such Vessel or Aircraft
    2. Transportation of passengers
    3. Imparting training on navigating such vessels
    4. Imparting training on Flying such aircraft
    5. Transportation of Goods
  • General Insurance, Servicing, repair & maintenance in so far related to such vehicles, Vessels, aircraft are not allowed except if it is used for.
  • 1. Purpose specified therein
    2. If above services received by manufacturer of such vehicles, vessels, aircrafts.
    3. If above services received by general insurance service provider in respect of such motor vehicles/vessels/aircrafts.
  • Foods & beverages,  outdoor catering, beauty treatment , health services, cosmetic & plastic surgery, leasing, renting or hiring of motor vehicles, vessels or aircraft  except it is used for making outward taxable supply of the same category of goods or services or both.
  • Membership of a club, health and fitness centre;
  • Rent-a-cab, life insurance and health insurance except where Government makes it obligatory for an employer to employee to provide services under any law or this inward supply is used for making outward taxable supply of the same category.
  • Travel benefits extended to employees on vacation such as leave/home travel concession
  • Work Contract for construction of an immovable property (other than Plant and Machinery) except it is used for an input service for further supply of Works Contracts.*
  • Goods & Services received for construction of immovable property (not plant & machinery)*

*Construction includes re‐ construction, renovation, additions or alteration or repairs to the extent of capitalization to the said immovable property.

  • Supply on which GST paid under Composition Scheme
  • Good and services received for Personal Use/consumption
  • Goods lost, stolen, destroy, written off or disposed by gift or free samples
  • Goods/service received by non‐resident taxable person except goods imported by him
  • Any tax paid due to fraud cases

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