Cases Where Input Tax Credits Not allowed

Input Tax Credits Not allowed in Following Eleven Circumstances as per Section 17(5)-
1. Motor Vehicles and other Conveyances except when such Vehicle used for –
(a) Sale of Such Vehicles or conveyance; (Like Car Dealers)
(b) Transportation of passengers; or
(c) Imparting training on driving, flying, navigating such vehicles or conveyance;
(d) Transportation of goods
2. Supply of goods or services or both –
i. Food and Beverages, Outdoor Catering, Beauty treatment, Health services, Cosmetic and plastic surgery except when dealer is in the business of sale or service of such items
ii. Membership of a club, health and fitness centre,
3. Rent-a-cab, Life insurance, Health insurance except
(i) 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;
(ii) when dealer is in the business of sale of service of such items
4. Travel benefits extended to employees on vacation such as LTC etc
5. Work Contract Service when supplied for construction of an immovable property (other than P & M) except where it is an input service for further supply of Work Contract Service.
6. Goods or Services or both received for construction of Immovable Property (Other than P&M) on his own account
including when such good or services are used in the course or furtherance of business.
7. Composition Dealer
8. Non-resident taxable person except on goods imported by him;
9. Personal Consumption of Goods and Services
10. Lost, Stolen, destroyed, written off or disposed of by way of gift or free samples; and
11. Tax paid on account of fraud, wilful misstatement or Suppression of facts; Detention, Seizure and release of goods and conveyances in transit;

About Nitika Bansal 121 Articles
I will regularly provide update on direct tax and indirect tax


RBI updates on Demonitisation

1. Why was the Scheme of Withdrawal of Legal Tender Character of the old Bank Notes in the denominations of ₹ 500 and ₹ 1000 introduced?


Ind AS Transition Facilitation Group (ITFG) Clarification Bulletin 6

‘Ind AS Transition Facilitation Group’ (ITFG) of Ind AS (IFRS) Implementation Committee
has been constituted for providing clarifications on timely basis on various issues related to
the applicability and/or implementation of Ind AS under the Companies (Indian Accounting
Standards) Rules, 2015, raised by preparers, users and other stakeholders.
Ind AS Transition Facilitation Group (ITFG) considered some issues received from members
and decided to issue following clarifications on November 29, 2016:
Issue 1
A debt-listed company has net worth for the last 3 years as follows: (more…)

Frequently Asked Questions (FAQs) on Withdrawal of Legal Tender Character of the Old High Denomination Bank Notes

Frequently Asked Questions

Frequently Asked Questions (FAQs) on Withdrawal of Legal Tender Character of the Old High Denomination Bank Notes

1. Why is this scheme?


Ind AS Transition Facilitation Group (ITFG) Clarification Bulletin 5

At the 5th meeting of Ind AS Transition Facilitation Group (ITFG) held on September 19, 2016 at Mumbai, certain issues received from members were discussed. The Group after due deliberations decided to issue following clarifications1 on the issues considered at the meeting:

Issue 1

ABC Ltd. is a listed company. The net worth of ABC Ltd. as on 31st March 2014 was Rs. 200 crores. ABC Ltd. had a subsidiary, namely, XYZ Ltd. as at 31st March, 2015 whose net worth, consisting only of share capital as at that date, was Rs. 600 crores. XYZ Ltd. was incorporated in January, 2015. It was incorporated only for the purposes of its divestment. The financial statements of XYZ Ltd. were not consolidated with that of ABC Ltd. as at 31st March, 2015 in view of requirements of paragraph 11 of Accounting Standard (AS) 21, Consolidated Financial Statements.

ABC Ltd. entered into agreement with a proposed acquirer of the subsidiary, i.e., PQR Ltd., in September, 2015. The entire ownership of XYZ Ltd. was finally transferred to the said acquirer in the first fortnight of April, 2016.

In the given case, whether the ABC Ltd. is required to comply with Ind AS from the financial year 2016-17? (more…)

FAQs on Place of Supply of Goods and Service under GST

Q 1. What is the need for the Place of Supply of Goods and Services under GST?

Ans. The basic principle of GST is that it should effectively tax the consumption of such supplies at the destination thereof or as the case may at the point of consumption. So place of supply provision determine the place i.e. taxable jurisdiction where the tax should reach. The place of supply determines whether a transaction is intra-state or inter-state. In other words, the place of Supply of Goods is required to determine whether a supply is subject to SGST plus CGSTin a given State or else would attract IGST if it is an inter-state supply. (more…)

FAQs on Transitional Provisions under Goods and Service Tax

Q 1. Will the CENVAT/ITC carried forward in the last return prior to GST under earlier law be available as ITC under GST?

Ans. Yes, the registered taxable person shall be entitled to such credit and it will get credited to his electronic credit ledger – section 143. (more…)