Section-17. Apportionment of credit and blocked credits
(1) Where the goods and/or services are
used by the registered taxable person partly
for the purpose of any business and
partly for other purposes, the amount of
credit shall be restricted to so much
of the input tax as is attributable to the
purposes of his business.
(2) Where the goods and / or services
are used by the registered taxable person
partly for effecting taxable supplies
including zero-rated supplies under this Act
or under the IGST Act, 2016 and
partly for effecting exempt supplies under the
said Acts, the amount of credit shall
be restricted to so much of the input tax as
is attributable to the said taxable
supplies including zero-rated supplies.
Explanation.- For the purposes of
this sub-section, exempt supplies shall include
supplies on which recipient is liable
to pay tax on reverse charge basis under subsection
(3) of section 8.
(3) A banking company or a financial
institution including a non-banking financial
company, engaged in supplying
services by way of accepting deposits, extending
loans or advances shall have the
option to either comply with the provisions of
sub-section (2), or avail of, every
month, an amount equal to fifty per cent of the
eligible input tax credit on inputs,
capital goods and input services in that month.
Explanation.- The option once exercised shall not be withdrawn during
the
remaining part of the financial year.
(4) Notwithstanding anything
contained in sub-section (1) of section 16 and subsection
(1), (2), (3) and (4) of section 18,
input tax credit shall not be available
in respect of the following:
(a) motor vehicles and other
conveyances except when they are used
(i) for making the following taxable
supplies, namely
(A) further supply of such vehicles
or conveyances ; or
(B) transportation of passengers; or
(C) imparting training on driving,
flying, navigating such vehicles or
conveyances;
(ii) for transportation of goods.
(b) supply of goods and services,
namely,
(i) food and beverages, outdoor
catering, beauty treatment, health
services, cosmetic and plastic
surgery except where such inward
supply of goods or services of a
particular category is used by a
registered taxable person for making
an outward taxable supply of
the same category of goods or
services;
(ii) membership of a club, health and
fitness centre,
(iii) rent-a-cab, life insurance,
health insurance except where the
Government notifies the services
which are obligatory for an
employer to provide to its employees
under any law for the time
being in force; and
(iv) travel benefits extended to
employees on vacation such as leave or
home travel concession.
(c) works contract services when
supplied for construction of immovable
property, other than plant and
machinery, except where it is an input service
for further supply of works contract
service;
(d) goods or services received by a
taxable person for construction of an
immovable property on his own
account, other than plant and machinery,
even when used in course or
furtherance of business;
Explanation 1.- For the purpose of this clause, the word
“construction” includes
re-construction, renovation,
additions or alterations or repairs, to the extent of
capitalization, to the said immovable
property.
Explanation 2.- ‘Plant and Machinery’ means apparatus, equipment,
machinery,
pipelines, telecommunication tower
fixed to earth by foundation or structural
support that are used for making
outward supply and includes such foundation
and structural supports but excludes
land, building or any other civil structures.
(e) goods and/or services on which
tax has been paid under section 9;
(f) goods and/or services used for
personal consumption;
(g) goods lost, stolen, destroyed,
written off or disposed of by way of gift or free
samples; and
(h) any tax paid in terms of sections
67, 89 or 90.
(5) The Central or a State Government
may, by notification issued in this behalf,
prescribe the manner in which the
credit referred to in sub-sections (1) and (2)
above may be attributed.
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