Post #28: Section 17(5) of CGST Act – Blocked Input Tax Credit

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 What is Section 17(5)?

Section 17(5) of the CGST Act specifies certain expenses on which Input Tax Credit (ITC) is NOT allowed, even if GST has been paid.

These are commonly known as Blocked Credits.

❌ Major Expenses Where ITC Is Blocked

✔️ Motor Vehicles
(Except when used for transport of goods, passengers, or training)
✔️ Food & Beverages / Catering
✔️ Outdoor Catering
✔️ Beauty Treatment & Health Services
✔️ Club Memberships
✔️ Life & Health Insurance
(except where mandatory under law)
✔️ Travel Benefits to Employees
✔️ Works Contract Services
(for construction of immovable property)
✔️ Goods Lost, Stolen, Destroyed or Written Off

⚠️ Important Practical Point

📌 ITC on blocked items cannot be claimed even if used for business purposes.

Wrong claim = interest + penalty.

🧠 Professional Insight

“Most GST notices arise due to incorrect ITC claims under Section 17(5).”

📌 Action for Businesses

✔️ Review expense ledgers
✔️ Identify blocked ITC monthly
✔️ Reverse ITC timely in GSTR-3B

👨‍💼 Sujit Boliar
GSTJIT Advisory
📞 90642 63759
🔗 linkedin.com/in/sujitboliar


#GST #BlockedITC #Section175 #GSTCompliance #InputTaxCredit #GSTJITAdvisory #SujitBoliar #TaxTips

Location: India

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