BLOCK CREDIT SECTION 17(5)

BLOCK CREDIT SECTION 17(5)

The provision of blocked credits categorically lays down that the ITC would not be available in respect of a few goods or services.

Let's decode this mystery and exceptions:

1. AAAR West Bengal

1.1 Bathula Mahesh Babu (24-Jan-2024)

ITC for such portion of expenses pertaining to re-construction, renovation, additions, alterations or repairs which are capitalized stands ineligible, related ITC available only when such expenses not capitalised in books.

2. AAR Maharashtra

2.1 Tata Motors Ltd. (25-Aug-2020)

Issue was hiring of bus/motor vehicle used for Transportation of employees to and from work place.

ITC available to applicant if bus hired for transportation of persons is having approved seating capacity of more than thirteen persons including driver. In case such capacity is below thirteen persons, then ITC would not be available.

2.2 Las Palmas Co-operative Society Ltd. (22-Jan-2020)

ITC of GST paid on maintenance charges for replacement of existing lift is ineligible.

Applicant, a co-operative housing society paying GST on maintenance charges collected from its members shall not be entitled to ITC of GST paid on replacement of existing lift/elevator at its own premises, as lift, after erection and installation is an immovable property.

3. AAR Karnataka

3.1 Mother Earth Environ Tech Pvt. Ltd. (13-Dec-2021)

Land filling pit has clearly been excluded from definition of 'plant and machinery'; and, hence, not eligible for input tax credit.

4. AAR Andhra Pradesh

4.1 Indian Cotton Solutions.com Pvt. Ltd. (08-Jun-18)

ITC on Motor Vehicles for business furtherance. Applicant pleading that said vehicles being used as Mobile Cotton Lab. for testing of cotton being their core business are eligible for ITC credit

HELD : In terms of Section 17(5) of CGST, ITC on motor vehicles is not admissible except for exceptions specified therein.

Since motor vehicles procured by applicant do not fall under these exceptions, Input Tax credit not admissible.

5. Madras High Court

5.1 ARS Steels & Alloy International Pvt. Ltd. (24-Jun-2021)

Where inputs are lost by consumption during the manufacturing process and such loss is inherent to the manufacturing process, the ITC on such lost goods is not blocked under S. 17(5)(h).

Hope you will find this useful.

Thanks

Abhishek Raja Ram