Do not Block GST Input Tax Credit for certain set of Services : ICAI

By | October 9, 2017
(Last Updated On: October 9, 2017)

Suggestions on GST Implementation Issues 28.09.2017 by ICAI Indirect Tax Committee

Law Related Issues

35. Blocking of Input Tax Credit for certain set of Services

Section 17(5)(b) of CGST Act, 2017 provides that no input tax credit is available on supply
of goods or services or both: —
i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and
plastic surgery except where an inward supply of goods or services or both of a
particular category is used by a registered person for making an outward taxable
supply of the same category of goods or services or both or as an element of a taxable
composite or mixed supply

ii) membership of a club, health and fitness centre;
iii) rent-a-cab, life insurance and health insurance with provided exceptions
iv) travel benefits extended to employees on vacation such as leave or home travel
concession.

Issue
Certain expenditure of the given nature can also be required to be made under the
requirements of any law and not necessarily for making taxable outward supplies of the same
category. Say, for example, food and beverages used in the canteen of a factory.

Suggestion
It is suggested that the facility of availing input tax credit not be blocked when goods and/or
services are used or intended to be used in the course or furtherance of business in lines with
the provisions of Section 17(1).

 

Read Suggestions on GST Implementation Issues 28.09.2017 by ICAI Indirect Tax Committee

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