Food, beverages, club memberships and others
ITC is not for the supply of following goods or services or both:
- Food and beverages
- Outdoor catering
- Beauty treatment
- Health services
- Cosmetic and plastic surgery
However, ITC will be available if the category of inward and outward supply is same or the component belongs to a mixed or composite supply under GST.
Example– Ajay Enterprises arranges for an office party for its employees. Ajay Enterprises will not be able to claim ITC on the food & beverages served.
2.Motor vehicles & conveyances
- ITC is not available for Motor vehicles used to transport persons, having a seating capacity of less than or equal to 13 persons (including the driver
- However, ITC is available if the seating capacity of such motor vehicles exceeds 13 persons. Further, ITC is not available on vessels and aircrafts.
Exceptions
- Supply of other vehicles or conveyances, vessels or aircrafts.
- Transportation of passengers
- Imparting training on driving, flying, navigating such vehicle or conveyances or vessels or aircrafts, respectively.
- Transportation of goods
3. Services of general insurance, servicing, repair and maintenance
No ITC is allowed on services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft referred to in (1).
Exceptions to ITC on insurance, repair or maintenance:
- Same as exceptions mentioned for motor vehicles/vessels/aircrafts
- where received by a taxable person engaged—
- In the manufacture of such motor vehicles, vessels or aircraft; or
- In the supply of general insurance services in respect of such motor vehicles, vessels or aircraft insured by him
4. Travel
- ITC is not available in the case of travel, benefits extended to employees on vacation such as leave or home travel concession.
- ITC will be allowed for travel for business purposes. Please read our article to know more about the impact of GST on airfare and rail fare.
Works contract
- ITC shall not be available for any work contract services.
- ITC for the construction of an immovable property cannot be availed, except where the input service is used for further work contract services.
No ITC would be available to the person who has made the payment of tax under
ITC cannot be availed on goods/services received by a non-resident taxable person.
No ITC will be available for the goods/ services used for personal purposes and not for business purposes.
No ITC is available for goods lost, stolen, destroyed, written off or given off as gift or free samples
5. No ITC in fraud cases
TC will not be available for any tax paid due to fraud cases which has resulted into –
- Non or short tax payment or
- Excessive refund or
- ITC utilized
- Fraud cases include fraud or willful misstatements or suppression of facts or confiscation and seizure of goods
6. Restaurants
- 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 to pay 18% GST and enjoy ITC.
7. Sale of membership in a club, health, fitness center
8. Rent-a-cab, life insurance, health insurance
9. ITC is not available for rent-a-cab, health insurance and life insurance.
