Can I claim ITC on employee health insurance?

You generally cannot claim ITC on employee health insurance. Section 17(5)(b) of CGST Act blocks ITC on health insurance. An exception applies only if providing such insurance is a statutory obligation for the employer.

Is ITC available on gifts or free samples?

No, you cannot claim ITC on gifts or free samples. Section 17(5)(h) of CGST Act specifically blocks ITC for goods disposed of as gifts or free samples. This prevents businesses from claiming credit on items not resulting in a taxable outward supply.

What is the penalty for wrongly claiming blocked credit under GST?

If you wrongfully claim blocked credit under GST, you must reverse it. The law also mandates an interest payment at 24% per annum. This interest applies from the date of the incorrect claim until the reversal date.

How do I identify ineligible ITC from my purchases?

You can identify ineligible ITC by reviewing your GSTR-2B statement. This auto-drafted document highlights purchases where ITC is unavailable under Section 17(5) of CGST Act. You should also compare this with your internal books of accounts.

Where should I report blocked ITC reversals in GSTR-3B?

You must report the reversal of ineligible ITC in Table 4(B) of your GSTR-3B. Since July 5, 2022, reporting these reversals in Table 4(D) is no longer required. Ensure timely and accurate reporting to maintain compliance.

Can I claim ITC on building an office for my business?

Generally, you cannot claim ITC on goods or services used for constructing an office building. Section 17(5)(d) of CGST Act blocks ITC for immovable property constructed on one’s account. An exception exists only for “plant and machinery” used in such construction.