GST Input Tax Credit Eligibility Checker (India): Sections 16 and 17(5)

About the GST Input Tax Credit Eligibility Checker (India): Sections 16 and 17(5)

Before you claim input tax credit on a purchase, check it here: choose what you bought and how you use it, and the checker applies the blocked credits of section 17(5) of the CGST Act as they stand now — motor vehicles and their exceptions, food and catering, beauty and health services, insurance, club membership, leave travel, works contracts and construction (with the plant and machinery exception), personal use, goods lost or given away, CSR and tax paid under section 74 — and the conditions of section 16: the invoice, GSTR-2B, receipt, the supplier’s payment of tax, your payment within 180 days and the time limit.

The answer is eligible, blocked or conditional, with the clause relied on, any reversal you must make under rules 37, 37A, 42 or 43, and the line of Table 4 of GSTR-3B where the credit — or its reversal — goes. Nothing you enter leaves your device.

Common uses

• Check a purchase before booking its input tax credit.
• Sort the credit in GSTR-2B into what to keep in Table 4(A) and what to reverse in 4(B)(1) or 4(B)(2).
• Answer a query from the department about a credit you claimed, with the clause and the rule.
• Revise section 17(5) for CA and CMA examinations, with the latest amendments.

Blocked credits, section 17(5)

• (a), (aa), (ab): motor vehicles for transporting persons with up to 13 seats (including the driver), vessels and aircraft — unless used for further supply of them, transporting passengers, training (or, for vessels and aircraft, transporting goods) — and their general insurance, servicing, repair and maintenance, except for those uses, their manufacturers and their insurers.
• (b): food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, renting of such vehicles, life and health insurance — unless used for an outward supply of the same category or as part of a taxable composite or mixed supply; membership of a club, health and fitness centre; travel benefits to employees on vacation. All of them are allowed where a law obliges the employer to provide them.
• (c), (d): works contract services, and goods and services, for construction of an immovable property on your own account — other than plant and machinery, which the Act now says expressly means plant and machinery; “construction” includes renovation, additions, alterations and capitalised repairs. Works contractors may take credit on works contract services they use to supply works contracts.
• (e)–(i): tax paid under the composition scheme; non-resident taxable persons (except imported goods); CSR activities; personal consumption; goods lost, stolen, destroyed, written off or given as gifts or free samples; tax paid under section 74 for periods up to FY 2023-24.

Conditions, section 16

• A tax invoice or debit note (or a bill of entry, a self-invoice for reverse charge, an ISD invoice).
• The supplier has reported it, so it appears in your GSTR-2B (rule 36(4)), and the credit is not restricted there.
• You have received the goods or services — including delivery to another person on your direction.
• The supplier has paid the tax: if the supplier has not filed GSTR-3B for that period by 30 September after the year, reverse the credit by 30 November (rule 37A) and take it again once the supplier files.
• You pay the supplier within 180 days of the invoice, or add the credit back with interest and take it again when you pay (rule 37).
• You file your own GSTR-3B, take the credit by 30 November after the financial year (or the annual return, if earlier) and do not claim depreciation on the tax.

Where it goes in GSTR-3B Table 4

Table 4(A) is filled from GSTR-2B: (1) imports of goods, (2) imports of services, (3) inward supplies under reverse charge, (4) from an Input Service Distributor, (5) all other credit. Blocked credits under section 17(5) and the reversals of rules 38, 42 and 43 are permanent and go in 4(B)(1); reversals you can reclaim later — rule 37, goods not received, tax not paid by the supplier — go in 4(B)(2), and when reclaimed in 4(A)(5) are also shown in 4(D)(1). Credit barred by the time limit or by the place-of-supply rules is reported in 4(D)(2) (Notification No. 14/2022-Central Tax; Circular No. 170/02/2022-GST).

Sources

Central Goods and Services Tax Act, 2017, sections 16 and 17, as amended, on CBIC’s GST site; CGST Rules, rules 36, 37, 37A, 42 and 43; Notification No. 14/2022-Central Tax (Table 4 of FORM GSTR-3B); Circulars No. 170/02/2022-GST and 172/04/2022-GST, on CBIC’s tax information portal.

Limitations

• One purchase at a time; the rule 42 and 43 reversal is flagged, not computed.
• Whether something is “plant and machinery”, “the same category” or “obligatory under law” is a question of fact; the checker takes your answer.
• The special credit rules for banks (rule 38), new registrations and switching schemes (section 18), and the transition from earlier taxes are not covered.
• Reference only, not tax advice.

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