Answer

1. F

   Facts

   Section 17(5) is the ITC blacklist, goods and services on which you CANNOT claim GST credit even if you paid GST on them. Most businesses unknowingly claim blocked credits, which then get reversed in GST audit. Know the list before filing GSTR-3B.

2. P

   Provisions and law

   • Sec 17(5)
   • Sec 17(5)(a)
   • Sec 17(5)(b)
   • Sec 17(5)(c)
3. A

   Analysis

   Most commonly wrongly claimed ITC (and then reversed): (1) Company car purchase, ITC blocked. Many businesses claim ₹3-5L ITC on car purchase and then face reversal. (2) Employee entertainment / team lunch, blocked. (3) Health insurance premium for employees, blocked (unless legally mandated). (4) Construction and renovation of office building, blocked on works contract. (5) Membership fees (gym, club), blocked. Exceptions that ARE allowed: Goods transport vehicle (truck, tempo), ITC available. More than 13-seat vehicles (bus for employee transport), ITC available. Motor vehicles for a driving school, available. Catering service buying food to serve clients, available. Insurance company buying health insurance (to reinsure/sell), available. Plant and machinery vs building: ITC on plant and machinery installation = allowed.

4. C

   Conclusion

   1. 1Before claiming any ITC, check if the supply falls under Section 17(5) blocked list
   2. 2Motor vehicle: check seating capacity and use, >13 seats or goods transport = allowed; company car = blocked
   3. 3Employee expenses: food/entertainment/health insurance/club membership, all blocked
   4. 4Construction and renovation of building: works contract ITC, blocked
   5. 5Goods or services for personal use of directors/employees, blocked
   6. 6Review all ITC claimed in GSTR-3B Table 4A, compare with purchase register

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.