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Share 4 BHK Independent
House
Rs. 1.5 Cr
Blocked Credit under GST | Section 17(5) | CGST Act, 2017
(https://taxguru.in/goods-and-service-tax/blocked-credit-gst-
section-175-cgst-act-2017.html)

 CA Santhosh Gupta Kethepalli (https://taxguru.in/author/santhosh-gupta/) Learn more

| Goods and Services Tax (https://taxguru.in/category/goods-and-service-tax/)
-
3 BHK Apartment
Articles (https://taxguru.in/type/articles/)
Rs. 50.0 L
 (https://taxguru.in/wp-admin/post.php?post=730374&action=edit) 13 Jul 2020
(https://taxguru.in/2020/07/13/)
 205,962 Views
 19 comments (https://taxguru.in/goods-and-service-tax/blocked-credit-gst-
Learn more
section-175-cgst-act-2017.html#pcomments)
Blocked Credit {Sec.17 (5) of CGST Act, 4 BHK Villa
2017} Rs. 2.85 Cr

Introduction:-

Though the idea behind implementation of

GST is free flow of tax credit, input tax
Learn more
credit is not available in respect of certain
inward supply of goods or services as per
Section 17(5) of the CGST Act, 2017. Housing.com
(http://taxguru.in/goods-and-service-
tax/president-assents-central-goods-
services-tax-act-2017.html)

{Sec.17 (5)} Cases where ITC is not available:-  Latest Posts

1) Motor Vehicles and Conveyances 1. Last day to Join GST, Customs & Income
Tax Courses at 40% Discount
I. ITC is not available for Motor vehicles used to transport persons, having a
(https://taxguru.in/goods-and-service-
seating capacity of less than or equal to 13 persons (including the driver) tax/self-learning-certification-gst-income-
including leasing, renting or hiring thereof. tax-taxguru.html)
2. Interplay of Sec 44AA, 44AB and 44AD of
II. Services of general insurance, servicing, repair and maintenance of aforesaid Income Tax Act,1961
(https://taxguru.in/income-tax/interplay-
motor vehicles.
sec-44aa-44ab-44ad-income-tax-act-
Ex: – ABC & Co. buys a car for their business then, they cannot claim ITC on the same. 1961.html)
3. Late fees under section 234H for non-
Exceptions to ITC on Motor Vehicles and Conveyances:- linking of PAN with Aadhaar
ITC will be available when the vehicle is used for making taxable supplies by the (https://taxguru.in/income-tax/late-fees-
section-234h-non-linking-pan-
following:- aadhaar.html)
a. Further Supply of such vehicles or conveyances, vessels or aircrafts [i.e. if you 4. HC stays Assessment Order Passed
Without Show Cause & Draft Assessment
are in the business of supplying cars then ITC will be available].
Order (https://taxguru.in/income-tax/hc-
Ex: – Car dealer purchases a car for Rs.10 lakh plus 4 lakh GST and the same car was stays-assessment-order-passed-show-
draft-assessment-order.html)
later sold for 15 lakhs along with Rs.5.60 lakh GST. Since he is a dealer, he can claim
ITC of 4 lakhs and pay only Rs.1.60 lakh (5.60 – 4). 5. Depreciation on Tenancy Rights allowable
under the Income Tax Act
(https://taxguru.in/income-
tax/depreciation-tenancy-right-disallowed-
subsequent-a-y-facts-same.html)
 6. Payments for computer software
sold/licenced on a CD/other physical
media cannot be classed as a royalty
(https://taxguru.in/income-tax/payments-
computer-software-sold-licenced-cd-other-
physical-media-classed-royalty.html)
7. Key decisions of Supreme Court for week
ending 15 August 2021
(https://taxguru.in/corporate-law/key-
decisions-supreme-court-week-15-august-
2021.html)
8. Written off of stock allowable if the same
had no realizable value
b. Transportation of passengers [i.e. if you are providing transportation of (https://taxguru.in/income-tax/written-off-
passengers then ITC will be allowed on the vehicle purchased]. stock-allowable-realizable-value.html)
9. Taxation of Segregated Portfolio Scheme
Ex: – M/s. ABC Tours purchased a bus for inter-city transport of passengers, then ITC
(https://taxguru.in/income-tax/taxation-
is available. segregated-portfolio-scheme.html)

c. Imparting training on driving, flying, navigating such vehicle or conveyances or 10. Free medicine samples given to physicians
by pharma companies, cannot be treated
vessels or aircrafts, respectively.
as freebies (https://taxguru.in/income-
Ex: – M/s. ABC Driving School purchases a car to give training to students, then the tax/free-medicine-samples-physicians-
pharma-companies-treated-freebies.html)
school can claim ITC on the GST paid on the purchase of car.
11. GST: Sections not enacted: (Part:1/3)
ITC would further be admissible for leasing, renting or hiring of motor vehicles when (https://taxguru.in/goods-and-service-
such motor vehicles are used for above said purposes or where the recipient is tax/gst-sections-enacted-part-1-3.html)

engaged in the manufacture of such motor vehicles or in the supply of general View All Latest Posts
insurance services in respect of such motor vehicles insured by him. (https://taxguru.in/page/2/)

2) Vessels and Aircraft

I. Including leasing, renting or hiring thereof.

II. Services of general insurance, Servicing, Repair and maintenance of aforesaid

vessels and aircrafts.

Exceptions to ITC on Vessels and Aircraft:-

When such Vessels and Aircraft are used for:

I. Further supply of such Vessels and Aircraft or

II. Transportation of passengers or

III. Imparting training on navigating / flying such vessels / aircraft.

 Popular Posts
IV. Transportation of goods [However Good Transport Agencies are not bought
under this purview]. 1. Last day to Join GST, Customs & Income
Tax Courses at 40% Discount
3) Supply of food and beverages, outdoor catering, beauty treatment, health services,
(https://taxguru.in/goods-and-service-
cosmetic and plastic surgery, life insurance and health insurance:- tax/self-learning-certification-gst-income-
tax-taxguru.html)
ITC would be available when inward supply of goods or services or both of a particular
2. Income Tax Calculator for Financial Year
category is used by a registered person for making an outward taxable supply of the
2020-21 for Individuals
same category of goods or services or both or as an element of a taxable composite (https://taxguru.in/income-tax/income-tax-
or mixed supply; calculator-financial-year-2020-21-regimes-
excel-salaried-individuals-india-ver-20-
Ex: – Vijay Enterprises arranges for an office party for its employees. Vijay Enterprises 01.html)
will not be able to claim ITC on the food & beverages served. 3. Empanelment with Indian Bank for
Concurrent / Stock Audit
And for the same party to get arranged, Vijay Enterprises has entered into agreement
(https://taxguru.in/chartered-
with M/s. Parajay Catering Services P Ltd for supply of Food & beverages, whereas the accountant/empanelment-indian-bank-
Parajay Enterprises has entered into a sub contract with M/s.Digvijay Catering concurrent-audit.html)
Services for special desserts, then the Parajay Catering services can claim the input of 4. Join Online Course on Advanced Excel for
the taxes paid to M/s.Digvijay Catering Services for the desserts provided. Professionals
(https://taxguru.in/chartered-
4) Membership of a club, health and fitness center and travel benefits extended to accountant/online-courses-gst-income-tax-
employees on vacation such as leave or home travel concession:- compliances-advanced-excel.html)
5. Bank of Baroda invites RFP for Concurrent
Exception:- Auditors Appointment
(https://taxguru.in/chartered-
a. ITC would be admissible where it is obligatory for an employer to provide such
accountant/bank-baroda-invites-rpf-
supplies to its employees under any law for the time being in force. concurrent-auditors-appointment.html)

Ex: – Mr.X, a Managing Director has taken membership of a club and the company View All Popular Posts
pays the membership fees, then ITC will not be available to the company or Mr. X. (https://taxguru.in/popular-posts/)
Ex: – Assuming the government passes a rule for all employers to provide mandatory
cab services to female staff in night shifts. ABC Ltd. hires a rent-a-cab to provide to
transportation to its female staff on night shifts. Then ITC will be available to ABC Ltd.
on the GST paid to the rent-a-cab service.

Ex: – ABC Ltd. offers a travel package to its employees for personal holidays. ITC on
GST paid by ABC Ltd. for the holiday package will not be allowed.

b. If the category is same for the inward supply and outward supply or it is a part of
the mixed or composite supply

Ex: – ABC Travels lends out a car to XYZ Travels. Then XYZ Travels can claim ITC on
the same.
 Featured Posts
5) Works contract services when supplied for construction[1] of an immovable
property (other than plant and machinery[2]) except where it is an input service for 1. Join Online Course on Advanced Excel for
further supply of works contract service:- Professionals
(https://taxguru.in/chartered-
ITC shall not be available for any work contract services. ITC for the construction of an accountant/online-courses-gst-income-tax-
immovable property cannot be availed, except where the input service is used for compliances-advanced-excel.html)

further work contract services. 2. Last day to Join GST, Customs & Income
Tax Courses at 40% Discount
Ex: – M/s. ABC Contractors are constructing an immovable property. They cannot (https://taxguru.in/goods-and-service-
claim any ITC on the works contract. However, ABC hires DEF Contractors for a portion tax/self-learning-certification-gst-income-
tax-taxguru.html)
of the works contract. ABC can claim ITC on the GST charged by DEF Contractors.
3. Problems being faced by taxpayers on new
6) Goods or services or both received by a taxable person for construction of an portal E-filing 2.0
immovable property (other than plant or machinery) on his own account including (https://taxguru.in/chartered-
accountant/problems-faced-taxpayers-
when such goods or services or both are used in the course or furtherance of
portal-e-filing-2-0.html)
business:-
4. Bank of Baroda invites RFP for Concurrent
No ITC is available for good or services for construction of an immovable property on Auditors Appointment
(https://taxguru.in/chartered-
his own account. Even if such goods or services are used in the course or furtherance
accountant/bank-baroda-invites-rpf-
of business, ITC will not be available. concurrent-auditors-appointment.html)

But this rule does not apply to plant or machinery. ITC is available on inputs used to 5. Empanelment with Indian Bank for
Concurrent / Stock Audit
manufacture plant and machinery for own use.
(https://taxguru.in/chartered-
Ex: – i. Ajay Steel Industries constructs an office building for its headquarters. ITC will accountant/empanelment-indian-bank-
concurrent-audit.html)
not be available.
View All Featured Posts
ii. Ajay Steel Industries also constructs a blast furnace to manufacture steel. ITC (https://taxguru.in/type/featured/)
is available since it is a plant.

7) Composition Scheme Sec.10 of CGST Act, 2017:-

 NEWSLETTER
No ITC would be available to the person who has made the payment of tax under
composition scheme in GST law. Join our newsletter to stay updated on
Taxation and Corporate Law.
8) Goods or services or both received by a Non-Resident Taxable Person:-

ITC cannot be availed on Services received by a non-resident taxable person. Enter your email address

Exception:- ITC is available on any goods imported by him.

Subscribe Now
9) No ITC for personal use

ITC will not be available for the goods and services used for personal purpose.

Thus supplies received for Personal purposes are Blocked.  Search Posts by Date
10) Goods lost, Stolen, Destroyed, written off or disposed of by way of gifts or free AUGUST 2021
samples:-
M T

Such goods being not used for providing taxable supplies, the ITC thereon is blocked
u/s 17(5).

11) Any tax paid in accordance with the provisions of sections 74, 129 and 130:-

In such cases tax was not paid with intention to evade tax the ITC thereon has been
2 3
prohibited in order to penalize such assesses.
(https://taxguru.in/2021/08/02/) (https://taxguru.in/2
[1] Construction includes re-construction, renovation, additions or alterations or
repairs, to the extent of capitalization, to the said immovable property.
9 10

(https://taxguru.in/2021/08/09/) (https://taxguru.in/2
[2] Plant and Machinery means apparatus, equipment, and machinery fixed to earth by M T

foundation or structural support that are used for making outward supply of goods or
16 17
services or both and includes such foundation and structural supports but excludes—
(i) land, building or any other civil structures; (ii) telecommunication towers; and (iii) (https://taxguru.in/2021/08/16/)
pipelines laid outside the factory premises
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Author Bio House

Name: CA Santhosh Gupta Kethepalli Rs. 1.5 Cr

(https://taxguru.in/author/santhosh-gupta/)
Qualification: CA in Job / Business
Company: N/A
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Location: Vijayawada, Andhra Pradesh, IN
Member Since: 05 May 2020 | Total Posts: 32
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gupta/) (https://taxguru.in/author/santhosh-gupta/) Rs. 50.0 L
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My Published Posts
Quarterly GST Return Monthly GST Payment Scheme (https://taxguru.in/goods-and-service-
tax/quarterly-gst-return-monthly-gst-payment-scheme.html) Learn more

Deduction in Respect of Employment of New Employees [Section 80JJAA] 4 BHK Villa

(https://taxguru.in/income-tax/deduction-respect-employment-employees-section-80jjaa.html)
Rs. 2.85 Cr
Section 80D Deduction – Medical Insurance Premium (https://taxguru.in/income-tax/section-
80d-deduction-medical-insurance-premium.html)
When Income of Previous Year assessed in Previous Year itself (https://taxguru.in/income-
tax/income-previous-year-assessed-previous-year.html)
Taxability of Gifts (https://taxguru.in/income-tax/taxability-gifts.html) Learn more

View More Published Posts (https://taxguru.in/author/santhosh-gupta/)

Housing.com

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
19 Comments
 Vikas says:

IF I am generating electricity from solar plant & selling it to government. For this generation i
have to put up a solar plant. can i take the benefit of GST for getting this solar plant installed.

taxguru.in/goods-and-service-tax/blocked-credit-gst-section-175-cgst-act-2017.html/?replytocom=229488#respond)

 June 26, 2021 at 4:04 pm (https://taxguru.in/goods-and-service-tax/blocked-credit-gst-

section-175-cgst-act-2017.html/#comment-229488)

Biswajit Nag says:

An unregistered building developer intended to collect additional amount equivalent to 5% on

cost of property assuming a contingent claim by the Government in future. Whether the same
is justified in view of law?

taxguru.in/goods-and-service-tax/blocked-credit-gst-section-175-cgst-act-2017.html/?replytocom=184852#respond)

 March 28, 2021 at 5:35 pm (https://taxguru.in/goods-and-service-tax/blocked-credit-gst-

section-175-cgst-act-2017.html/#comment-184852)

manish swaika says:

SIR I HAVE PURCHASE BIKE FOR BUSINESS PURPOSE THEN ITC ADMISSABLE OR NOT

taxguru.in/goods-and-service-tax/blocked-credit-gst-section-175-cgst-act-2017.html/?replytocom=179392#respond)

 March 17, 2021 at 3:24 pm (https://taxguru.in/goods-and-service-tax/blocked-credit-gst-

section-175-cgst-act-2017.html/#comment-179392)

Kinjal Sadhu says:

NO YOU CANNOT

taxguru.in/goods-and-service-tax/blocked-credit-gst-section-175-cgst-act-2017.html/?replytocom=181844#respond)

 March 22, 2021 at 3:34 pm (https://taxguru.in/goods-and-service-tax/blocked-credit-

gst-section-175-cgst-act-2017.html/#comment-181844)

Bhaskar Dutta says:

Please guide me can I taken credit for personal car accessories

taxguru.in/goods-and-service-tax/blocked-credit-gst-section-175-cgst-act-2017.html/?replytocom=174971#respond)

 February 11, 2021 at 11:45 am (https://taxguru.in/goods-and-service-tax/blocked-credit-gst-

section-175-cgst-act-2017.html/#comment-174971)

VARUN JAIN says:

If a Hotel purchases 7 setaer car for guest services. Is it eligible for ITC?

taxguru.in/goods-and-service-tax/blocked-credit-gst-section-175-cgst-act-2017.html/?replytocom=174671#respond)

 February 6, 2021 at 6:19 pm (https://taxguru.in/goods-and-service-tax/blocked-credit-gst-

section-175-cgst-act-2017.html/#comment-174671)

MANAS AGRAWAL says:

NO YOU CANNOT.
taxguru.in/goods-and-service-tax/blocked-credit-gst-section-175-cgst-act-2017.html/?replytocom=233275#respond)

 July 7, 2021 at 8:58 am (https://taxguru.in/goods-and-service-tax/blocked-credit-gst-

section-175-cgst-act-2017.html/#comment-233275)

Ayush Toshniwal says:

Sir I bought a truck for business purpose. can i take his input in GST ????

taxguru.in/goods-and-service-tax/blocked-credit-gst-section-175-cgst-act-2017.html/?replytocom=173724#respond)

 January 25, 2021 at 1:52 pm (https://taxguru.in/goods-and-service-tax/blocked-credit-gst-

section-175-cgst-act-2017.html/#comment-173724)

samuel says:

I want to construct an auditorium for giving rent for function. We have gst registration. can we
take ITC from meterial purchase

taxguru.in/goods-and-service-tax/blocked-credit-gst-section-175-cgst-act-2017.html/?replytocom=173077#respond)

 January 16, 2021 at 7:48 pm (https://taxguru.in/goods-and-service-tax/blocked-credit-gst-

section-175-cgst-act-2017.html/#comment-173077)

Hari says:

Hi sir ,
My Company production is a software development. Company Office in SEZ Unit and we have
gst Exemption certificate. My Doubt we r a customer of one chit company . last month we
decide to take the price amount . so Chit Company will deduct gst or With out gst?

taxguru.in/goods-and-service-tax/blocked-credit-gst-section-175-cgst-act-2017.html/?replytocom=172307#respond)

 January 7, 2021 at 11:38 am (https://taxguru.in/goods-and-service-tax/blocked-credit-gst-

section-175-cgst-act-2017.html/#comment-172307)

Harsh says:

Can we claim ITC on Purchase of Gas Cylinder for Office.

taxguru.in/goods-and-service-tax/blocked-credit-gst-section-175-cgst-act-2017.html/?replytocom=168745#respond)

 November 23, 2020 at 11:56 am (https://taxguru.in/goods-and-service-tax/blocked-credit-

gst-section-175-cgst-act-2017.html/#comment-168745)

samuel says:

Sir can i claim itc from tea exp, office exp

taxguru.in/goods-and-service-tax/blocked-credit-gst-section-175-cgst-act-2017.html/?replytocom=168384#respond)

 November 16, 2020 at 5:02 pm (https://taxguru.in/goods-and-service-tax/blocked-credit-gst-

section-175-cgst-act-2017.html/#comment-168384)

Ashu Reddy says:

Thanks for such a wonderful explanation Mr.Santhosh

taxguru.in/goods-and-service-tax/blocked-credit-gst-section-175-cgst-act-2017.html/?replytocom=168101#respond)
  November 9, 2020 at 9:59 pm (https://taxguru.in/goods-and-service-tax/blocked-credit-gst-

section-175-cgst-act-2017.html/#comment-168101)

RAJIB KARMAKAR says:

Sir can i take ITC on purchase of stationery item for office use.

taxguru.in/goods-and-service-tax/blocked-credit-gst-section-175-cgst-act-2017.html/?replytocom=165922#respond)

 October 13, 2020 at 11:53 am (https://taxguru.in/goods-and-service-tax/blocked-credit-gst-

section-175-cgst-act-2017.html/#comment-165922)

murali says:

when i use the car for office purpose (Car is in the name of company), why we should not take
credit for ITC I As the car is used for furtherance of business

taxguru.in/goods-and-service-tax/blocked-credit-gst-section-175-cgst-act-2017.html/?replytocom=161495#respond)

 August 25, 2020 at 11:32 am (https://taxguru.in/goods-and-service-tax/blocked-credit-gst-

section-175-cgst-act-2017.html/#comment-161495)

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