Non-Eligible GST Input Tax Credit (ITC) – Key Vocabulary

Vocabulary flashcards covering the main categories and conditions under which GST input tax credit is blocked or restricted, as highlighted in the lecture notes.

Input Tax Credit (ITC)

A mechanism allowing GST-registered persons to offset the GST paid on purchases (inputs) against the GST collected on sales (outputs).

Blocked ITC / Non-Eligible ITC

Categories of goods or services on which claiming input tax credit is disallowed or restricted under GST law.

Motor Vehicles & Conveyances (Blocked ITC)

No ITC unless the vehicle is used for making a further taxable supply of the same category (e.g., car dealer, transporter, driving school, or passenger transport service).

Transport of Goods

One of the specific uses that permits ITC on motor vehicles when the vehicle is employed for carrying goods for further taxable supply.

Food, Beverages & Outdoor Catering

ITC not available unless these items are supplied onward as a taxable supply of the same category (e.g., a caterer buying food ingredients).

Health Services

Medical, clinical, or diagnostic services on which ITC is expressly disallowed under GST.

Beauty Treatment Services

Cosmetic or aesthetic services whose related GST cannot be claimed as ITC.

Membership of Clubs & Fitness Centres

Fees for gyms, clubs, or sports facilities for which ITC is not permitted.

Rent-a-Cab Services

Hiring of motor vehicles where ITC is blocked unless mandated by law for the employer to provide to employees.

Health Insurance & Life Insurance (Employer Provided)

Insurance premiums with ITC restricted; allowed only when the employer is legally obliged to provide such cover.

Travel Benefits to Employees

Vacation or personal travel provided to staff; ITC on related expenses is disallowed.

Works Contract Services (for Immovable Property)

Construction or repair contracts where ITC is blocked unless the recipient uses the service to supply another works contract service.

Goods or Services for Personal Use

Items consumed personally rather than for business; corresponding ITC is disallowed.

Goods Lost, Stolen, Destroyed, Gifted, or Given as Free Samples

Situations where ITC on such goods is expressly blocked because the goods do not contribute to taxable outward supplies.

Composition Scheme Dealer Purchases

Supplies received from a composition taxpayer on which ITC cannot be claimed by the recipient.

Purchases from Unregistered Suppliers

No ITC unless GST has been paid under the reverse-charge mechanism and the supplier becomes GST-registered.