GST
Blocked credit claimed and caught in DRC-01C
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Facts
Credit on motor vehicles, food and beverages and several other items is blocked under Sec 17(5), except in specific cases. If such credit was claimed, it is not allowed even if it is in GSTR-2B, and it must be reversed with interest if used.
Provisions and law
- Sec 17(5), CGST Act 2017List of blocked credits such as motor vehicles, food, club fees and personal use
- Sec 50(3), CGST Act 2017Interest on ITC wrongly availed and utilised
Analysis
GSTR-2B shows all invoices, including blocked ones, and GSTR-3B should reverse blocked credit. If you claimed ₹1,20,000 on a car not used for an allowed purpose, pay it back. Exceptions exist, for example vehicles used for transporting goods, so check each item before paying.
Conclusion
- List blocked items in the claim
- Check if any Sec 17(5) exception applies
- Pay back the rest through DRC-03 with interest if used
- Set up blocked-credit tags in your books
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