List Of Items On Which GST ITC Is Not Available

K M GATECHA & CO LLP-CA in Ahmedabad

Post author:K M GATECHA CO LLP
Post published:24/03/2022
Post category:GST refund / GST(Goods and Services Tax) / Income Tax Dedutions / Income Tax Updates / TDS

In this article, we have listed as such items, which are not eligible for the input tax credit under GST. But first, we need to understand the term ‘ITC’. ITC stands for Input Tax Credit, which means, at the time of paying tax on output, you can reduce the tax you have already paid on inputs. It is a process of claiming the credit which is paid at the time of purchase of Goods and Services. As per the current update from January 1, 2022, ITC claims will be allowed only if it appears in GSTR-2B .so the taxpayers can no longer claim 5% provisional input tax credit under the CGST rule 36(4).

Cases Where Input Tax Credit under GST Cannot Be Availed

S.NO.	Category of goods and services exceptions	Exceptions where ITC is allowed
1.	Motor vehicles & conveyances	Supply of other vehicles or conveyances, vessels, or aircraft. Transportation of passengers. Imparting training on driving, flying, navigating such vehicles or conveyances or vessels or aircraft, respectively. Transportation of goods
2.	Food, beverages, Health Services Cosmetic, Plastic Surgery, and others	ITC will be available in the category of inward and outward supply is the same or the component belongs to a mixed or composite supply under GST. ITC will not for the supply of following goods or services or both: Food and beverages, Outdoor catering, Beauty treatment, Health services, Cosmetic and plastic surgery
3.	Sale of membership in a club, health, fitness center	No ITC will be allowed on any membership fees for gyms, clubs, etc
4.	Services of general insurance, servicing, repair, and maintenance	No ITC is allowed on services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels, or aircraft
5.	Rent-a-cab, life insurance, health insurance	Any services which are made obligatory for an employer to provide its employee by the Indian Government under any current law in force. If the category is the same for the inward supply and outward supply or it is a part of the mixed or composite supply.
6.	Travel benefits	ITC is not available in the case of travel, benefits
7.	work contract services	ITC shall not be available for any work contract services. ITC for the construction of immovable property cannot be availed, except where the input service is used for further work contract services.
8.	composition scheme in GST law	No ITC would be available to the person who has made the payment of tax under the composition scheme in GST law.
9.	Non-resident taxable person	ITC cannot be availed on goods/services received by a non-resident taxable person. Except ITC is only available on any goods imported by him
10.	Goods/ Services used for personal purposes and not for business purposes	No ITC will be available for the goods/ services used for personal purposes and not for business purposes.
11.	Free samples and destroyed goods	· No ITC is available for goods lost, stolen, destroyed, written off, or given off as gifts or free samples.
12.	No ITC in fraud cases	ITC will not be available for any tax paid due to fraud cases that have resulted in –Non or short tax payment or excessive refund or ITC utilized
13.	Lost or Stolen or Damaged Goods	No ITC is available for goods lost, stolen, destroyed, written off, or disposed of by way of gift or free samples.

Frequently Asked questions

What are the conditions for taking input tax credit?

the input tax credit can be claimed only by a person that has a GST registration and has filed the GSTR 2 returns. services. The said goods or services or both should be received. The supplier has made the GST payment that is charged to the government concerning such supply.

What is eligible and ineligible ITC?

ITC used for business purposes will be declared as eligible ITC and those used for other purposes will not be able to claim as ITC except blocked credit, which is specifically supplied separately. The ITC eligibility is based on whether the same is used for taxable supplies or exempt supplies.

Is credit of all input tax charged on supply of goods or services allowed under GST?

A registered person is entitled to take credit of input tax charged on the supply of goods or services or both to him which are used or intended to be used in the course or furtherance of business, subject to other conditions and restrictions.

Where the registered taxable person has claimed depreciation on the tax component of the cost of capital goods under the provisions of the Income Tax Act,1961, will ITC be allowed in such cases?

The input tax credit shall not be allowed on the said tax component in respect of which depreciation has been claimed.