Ineligible Input tax credit under GST

Ineligible Input tax credit under GST

Following are the goods and services where the GST law has imposed restriction while availing GST input tax credit, primarily called as Ineligible Input tax credit. We will discuss about the extent and eligibility of ITC of these goods and services.

1. ITC for Motor Vehicles is not available.

The GST levied on purchase of Motor vehicles and conveyance is an ineligible Input tax credit. However, there are few exception cases where GST credit is available. These are:

  1. Dealers who are engaged in further supply of such vehicles or conveyances.
  2. Those engaged in business of transportation of goods or passengers
  3. Those engaged in business of imparting training on driving, flying, navigating such vehicles or conveyances

2.Membership of club, health & fitness center

The GST levied on membership fee of clubs, health & fitness center is an ineligible Input tax credit to anybody

3.Rent-a-cab services, Life & health Insurance

The GST levied on above services center is not available as credit to anybody except under the following situation:

  1. Where it is obligatory for an employer to provide such services to its employees under any law.
  2. Where such inward supply of goods or services is used by a registered person for making an outward taxable supply of the same category of goods or services.

4.Works contract services for construction of immovable property

 The GST levied on Works contract services for construction of immovable property, other than plant and machinery. However, credit of GST paid on works contract services will be allowed if the output is also works contract services.

5.Supply of goods and services such as food & beverages, outdoor catering, beauty treatment, health services, cosmetic & plastic surgery

 The GST levied on above services center is not available as credit to anybody except under the following situation:

  1. Where such inward supply of goods or services is used by a registered person for making an outward taxable supply of the same category of goods or services.

7.Goods and services received by a Non-resident

 ITC on Goods or services received by a non-resident taxable person is not eligible except on goods imported by him.

8.Goods and services procured for personal consumption

 No ITC is available on goods or services procured for personal consumption

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