14/01/2026
Blocked Credit – Section 17(5) of CGST Act
Section 17(5) lists cases where Input Tax Credit (ITC) is NOT allowed, even if goods/services are used in business.
Here’s a clear and updated summary 👇
🚫 ITC NOT available on
1️⃣ Motor Vehicles & Conveyances
ITC blocked on cars, bikes, etc.
Except when used for:
Further supply (sale) of vehicles
Passenger transportation
Driving training
Transport of goods
2️⃣ Food, Beverages & Personal Use Items
No ITC on:
Food & drinks
Outdoor catering
Beauty treatment
Health services
Cosmetic & plastic surgery
Allowed only if:
You are in the same line of business (e.g., caterer claiming ITC on catering).
3️⃣ Memberships & Travel Benefits
ITC blocked on:
Club, gym, fitness centre fees
Employee vacation / LTC / travel benefits
4️⃣ Works Contract Services
ITC not allowed when used for construction of immovable property.
✔ Allowed if works contract is used for further supply of works contract service.
5️⃣ Construction of Building / Property
No ITC on goods or services used to construct:
Office building
Factory building
Godown
(for own use, even if used for business)
6️⃣ Goods/Services for Personal Use
Any ITC relating to personal consumption is blocked.
7️⃣ Free Samples, Gifts & Lost Goods
No ITC if goods are:
Lost
Stolen
Destroyed
Written off
Given as free samples / gifts
8️⃣ Tax Paid under Demand / Penalty
ITC not allowed on GST paid due to:
Fraud
Suppression
Wilful misstatement
(Sections 74, 129, 130)
