Demystifying Blocked Credits: ICAI’s New Guide for Flawless GST Compliance
- Comprehensive Update on Input Tax Credit Restrictions
The Institute of Chartered Accountants of India (ICAI) has released a revised edition of the “Handbook on Blocked Credit under GST,” updated up to November 10, 2025. This publication is designed to enhance clarity for taxpayers and professionals regarding the complex provisions of Section 17(5) of the CGST Act, which dictates when Input Tax Credit (ITC) cannot be claimed.
- Detailed Analysis of Legal and Procedural Amendments
The handbook offers a structured breakdown of recent legal changes, including the matching mechanisms under Sections 16 and 38. It also incorporates significant judicial pronouncements from the Supreme Court and High Courts, specifically addressing the legal debate of ITC as a “vested right” versus a “concession.”
- Sector-Specific Guidance for Restricted Credits
Recognizing industries where blocked credits are a frequent issue, the guide provides expanded, practical guidance for sectors such as motor vehicles, food and beverages, insurance, and construction. It also covers complex scenarios like employer-employee supplies where ITC is often restricted.
- Clarifications on Documentation and Supplier Compliance
To bridge interpretational gaps, the edition includes updated coverage on the documentary requirements and supplier compliance conditions necessary for availing ITC. It also integrates clarifications from various CBIC circulars regarding issues like the deemed receipt of goods, time limits for claims, and the treatment of retention payments.
- Commitment to Ease of Doing Business
The release reinforces ICAI’s support for the government’s objective of uniform GST understanding and transparency. By providing a clear resource for bridging interpretational gaps, the handbook aims to support GST practitioners, corporates, and academicians in ensuring smooth and accurate compliance.
Source :- Handbook-on-Blocked-Credit-under-GST-November2nd-2025