Restriction on Availing Input Tax Credit

Under this we can find what are the restriction on availing Input Tax Credit.

Cases when there is restriction on availing Input Tax Credit

  • Input tax credit is only available to people with gst registration, so they should have company registered under gst.
  • If a person uses goods, services or both for the purpose of business, they are only eligible to take input tax credit.  Anything which is not used for business purpose, such credit will not be available to the assesses.
  • ITC not available on motor cycle and other conveyance.
  • Further supply of such vehicles or conveyances.
  • Transportation of goods.
  • Imparting training on driving, flying, navigating such vehicles or conveyances.
  • Transportation of passengers.
  • If we provide same category of goods and services like food and beverages, outdoor catering, beauty treatment, health services, cosmetics and plastic surgery then we can avail ITC but if we provide other than same category goods, we cannot avail benefit of ITC.
  • Membership of club, health and fitness center.
  •  Rent a cab, life insurance and health insurance but under certain exemption

Some more cases, where ITC cannot be availed under GST

  • Travel benefit provides to employees on vacation.
  • Goods lost, stolen destroyed, written off or disposed or by way of gift or free sample.
  • Procuring goods and services from composition dealer shall not be allowed to take the benefit of ITC.
  • Work contract services, when supplied for construction of any immovable property but under certain exemption
  • Input services for further supply of works contract services.
  • If we used goods and services for our own consumption so, under this condition we cannot avail benefit.

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