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Ineligible ITC Under GST


Under GST some specific cases are mentioned where ITC cannot be availed which are as follows:

1.   Motor Vehicles & Other conveyances 

Exceptions: for making following taxable supplies:
·         Further supply of such vehicles or conveyances
·         transportation of passengers
·         imparting training on driving, flying, navigating such vehicles or conveyances
·         Transportation of Goods (other than GTA)

2.   Food and Beverages, Outdoor catering, Beauty treatment, Health services, Cosmetic and Plastic surgery

Exception: Category of inward and outward supply is same or the component belongs to a mixed or composite supply under GST

3.   Membership of a club, Health and Fitness Centre

4.   Rent-a-cab, Life insurance and Health insurance

Exception: for cases covered as under:
·         Any services which are made obligatory for an employer to provide its employee by the Indian Government under any current law in force.
·         Category of inward and outward supply is same or the component belongs to a mixed or composite supply under GST.

5.   Travel

Exception: Travel for business purposes

6.   Works Contract Service for construction of immovable property (other than Plant & Machinery)

Exception: used for further supply of Works Contract Service

7.   Goods/Services used for construction of immovable property (other than Plant & Machinery) on own account

8.   Tax paid under Composition Scheme

9.   Goods/Services/both received by Non-Resident

Exception: Goods imported by him

10.               Goods/Services/both for Personal Use

11.               Goods lost, stolen, destroyed, written off or given off as gift or free samples

12.               No ITC in fraud cases

·         Non or short tax payment
·         Excessive refund
·         Wrong availment/utilization of ITC

13.               No ITC on restaurants

As per Notification No. 46/2017-Central Tax (Rate), dated 14th November 2017, standalone restaurants will charge only 5% GST but cannot enjoy any ITC on the inputs.
However, restaurants as part of hotels with room tariffs exceeding Rs. 7,500 still continue pay 18% GST and enjoy ITC.


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