ITC Blocked Credits under Section 17(5) – Complete Guide

Input Tax Credit (ITC) is a major benefit under GST, but Section 17(5) restricts credit on certain goods and services. These are called blocked credits.

List of Blocked ITC

• Motor vehicles (except specified cases)
• Food and beverages
• Club memberships
• Personal expenses
• Works contract services
• Goods lost or destroyed

Exceptions to Blocked ITC

• Further supply of goods/services
• Transport business usage
• Statutory obligations

Compliance Risks

• Wrong ITC claims attract penalties
• Interest liability on reversal
• GST notices and audits

Conclusion

Understanding blocked ITC provisions helps businesses avoid incorrect credit claims and ensures proper compliance.

For professional GST advisory, consult a GST Consultant in Mumbai.