Input Tax Credit not available in GST

Input Tax Credit in GST is crucial part. Very important thing in business point of view.In business, assesee has to discharge his liability of GST on monthly basis after adjusting the accumulated credit. But this accumulated credit is the result of inputs on various purchases (both goods as well as services). So, we must ensure to correctness of GST liability arising after ITC adjusted.

However, one more thing we should not forget here that, some supply whose creditare not available in GST mention in sub section 5 of section 17 (Apportionment of credit and blocked credits). Here is the list of supply on which ITC is not available:

1. Motor vehicles and other conveyancesexcept when;
   • vehicle used for supply of other vehicles or conveyance.
   • vehicle used for transportation of passengers
   • vehicle used for imparting training
   • vehicle used for transportation of goods
2. Food and beverage
3. Outdoor catering
4. Beauty treatment
5. Health services
6. Cosmetic and plastic surgery Please note that point no 2 to 6 the same rule applies here, when supply of inward and outward category is same then ITC available. Means any person is doing catering business then he is liable to get inputs on catering.
7. Membership in a club, health, fitness centre
8. Rent a cab service
9. Health insurance and life insurance
10. Travel benefits extended to employees on vacation such as leave or home travel concession.Input tax credit on rent a cab service, expenses incurred on health insurance and life insurance are available in case; where government made it obligatory to employer to provide such type of services to employees.
11. Works contract services when supplied for construction of an immovable property
12. ITC not available on construction of immovable property.
13. Goods lost, stolen, destroyed, written off by way of gift or free samples.So, we must take care, not availed input tax credit of GST on above list. It may attract interest or penalty for the period between availed ITC and reversal thereof.

This article is shared by Jitendra Gurav. The author can be reached on jitendra.gurav@gmail.com or mobile no. 9823157870.