GST
Block of Credit
Tax Adda
15 Aug 2026
2 min read
Blocked Credit Categories under Section 17(5)
| Clause | Blocked Item | Exceptions Allowed |
|---|---|---|
| 17(5)(a) | Motor vehicles for transport of persons (≤13 seats) | Resale, passenger transport, driving instruction |
| 17(5)(aa) | Insurance, servicing, repair of vehicles in (a) | Same exceptions as above |
| 17(5)(ab) | Vessels, aircraft | Allowed if used for transport, training, resale |
| 17(5)(b) | Food, beverages, outdoor catering, beauty treatment, health services, fitness, insurance | Allowed if used for same line of business (e.g., catering company buying food) |
| 17(5)(c) | Works contract services for construction of immovable property | Allowed if used for further supply of works contract |
| 17(5)(d) | Goods/services for construction of immovable property (other than plant & machinery) | No exceptions |
| 17(5)(e) | Membership of clubs, gyms, recreational facilities | None |
| 17(5)(f) | Goods/services for personal consumption | None |
| 17(5)(g) | Tax paid under Section 74 (fraud, misstatement, suppression) | None |
| 17(5)(h) | Goods lost, stolen, destroyed, written off, or given as free samples | None |
| 17(5)(i) | Tax paid under Sections 129 & 130 (detention/confiscation of goods) | Removed after 2024 amendment |
Wrong ITC claim → reversal + 24% interest per annum on wrongly claimed amounts.
Blocked ITC must be reversed in GSTR-3B Table 4(B)(1) and cannot be credited to the Electronic Credit Ledger.
Budget 2025 amendment clarified wording in clause (d) (“plant and machinery”), aligning with the definition in Section 17.
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