Index :
- Introduction
- Blocked Credit -I
- Blocked Credit -II
- Blocked Credit – III
- Blocked Credit – IV
- Blocked Credit – V
As per Section 16 (1), Every registered person, shall be entitled to avail input tax credit if the goods and services received is used or intended to be used for business purposes.
Section 18(1) talks about Availability of Credit during special Circumstances.
E.g. : ITC on Stocks , inputs contained in finished and semi finished goods.
Section 17 (5)
Notwithstanding anything contained in Section 16(1) and Section 18 (1), Input tax credit shall not be availed in respect of the following Goods and Services.
In Short,credit which cannot be utilized or considered by a Registered Taxpayer is Known as Blocked Credit.
MOTOR VEHICLE
- For Passenger Transport
- With Approved Sitting Capacity upto 13 (Inclusive of Driver)
Except when used for :
- Making taxable further supply of such vehicle
- Supplying Taxable transportation of Passengers
- Giving taxable training of Driving such Vehicle
VESSELS / AIRCRAFT
Credit of these inputs won’t be allowed unless used for the exception as above 3 points and if it is used for transportation of Goods.
Except when :
- ITC on such vehicle / Vessel /Aircraft not blocked
- Such Services received by a taxable person who is engaged in
1. Manufacturer of Such Vehicle/ Vessel /Aircraft
2. Providing Insurance Services in respect of them
- Food & Beverages/Outdoor Catering
- Beauty treatment/Health Services/ Cosmetic and Plastic Surgery
- Life or Health Insurance
- Leasing / Renting / hiring of Motor Vehicle/vessel/aircraft (except when used for purposes specified there)
- Club membership/health & fitness center Membership
- Travel benefits to employees on vacation, like Leave travel Concession
Overall Exception : Except where Govt notifies that obligatory for employer to provide to employee under any law.
Works Contract Service for construction of Immovable property
(except where used for further supply of works contract service only)
Goods/ Services /Both for Construction of Immovable property
(Except P&M) on own account, incl. when for business purpose.
Construction includes re-construction/ renovation/ additions /alterations/repairs which are capitalized to the said immovable property
Plant & Machinery means apparatus, equipment and machinery fixed to earth by foundation or structural support used for making an outward supply of goods /services/ both & includes such foundation /structural support but excludes
- Supplies used for Personal Consumption
- Goods lost/stolen/destroyed/written off/gifted/given as free Samples
- Supplies received by NR Taxable person (except goods imported by him)
- Supplies received from Composition taxable person
- Any Tax paid under the provision of Section 74, 129, 130 (Fraud, Detention , Confiscation).