Blocked Credit Under Section 17(5) of the CGST Act
About GST has been introduced in India with the motive of “One Nation One Tax” by providing free flow of credits and eliminating cascading effects in various indirect taxes and simplifying the tax structure. One of the most important reasons for introducing GST in India was the Input Tax Credit, but ITC is not available in every case. There are certain supplies mentioned under section 17(5) of the CGST Act where input tax credit under GST is not available. These supplies are also termed “ Blocked Credit ”. Now, let’s understand each case and exceptions to these in simple terms - Nature of Cases where ITC is not available. ➤ Motor vehicles and other conveyances ITC is not available for motor vehicles for transportation of people having approved seating capacity of not more than 13 persons including the driver including leasing, renting or hiring thereof. Exceptions : ITC is available and not blocked when used for : 1. Further Supply of Vehicles 2. Transportation of passenger