Which Expenses are Not Allowed In GST | What are Ineligible ITC In GST | GST ITC Not Available List

Summary

This video explains the types of expenses that cannot be claimed for Input Tax Credit (ITC) under GST. It covers scenarios such as banking services, motor vehicles, food and beverages, personal memberships, health treatments, and personal expenses like travel and gifts. The video also guides how to reverse non-eligible ITC through the GST portal, ensuring that business owners avoid claiming ITC on personal expenses or non-GST items. The creator advises viewers to contact an expert for proper GST filing and offers solutions to handle ITC issues effectively.

Takeaways

• 😀 ITC cannot be claimed on bank services and charges under GST.
• 🚗 ITC is generally not allowed for motor vehicle purchases unless the business deals specifically with vehicles.
• 🏋️‍♂️ ITC cannot be claimed on memberships to personal use clubs or health centers.
• 🍽️ ITC cannot be claimed on food-related expenses, including restaurant bills.
• 💊 ITC cannot be claimed for personal medical treatments or health services.
• 🔧 ITC cannot be claimed for repairs and maintenance of personal motor vehicles.
• ✈️ ITC is not allowed on travel expenses for directors, partners, or employees, whether personal or business-related.
• 💼 ITC cannot be claimed on life or health insurance premiums for personal use.
• 🎁 ITC cannot be claimed on gifts or samples provided without consideration.
• 🚫 Personal consumption expenses, whether goods or services, are not eligible for ITC claims under GST.
• 🔄 Any disallowed ITC must be reversed in the GST return by filling the appropriate details in the GST portal.

Q & A

What is ITC and why is it important for businesses?

ITC (Input Tax Credit) allows businesses to reduce their GST liability by claiming credits for the tax paid on business-related purchases. It helps businesses avoid paying tax on tax, improving cash flow and reducing costs.

Can ITC be claimed for bank-related expenses?

No, ITC cannot be claimed for any bank-related expenses, even if the bank service is used for business purposes.

Under what conditions can ITC be claimed on motor vehicles?

ITC on motor vehicles can only be claimed if the business is specifically related to the sale or purchase of motor vehicles. Otherwise, ITC cannot be claimed on vehicle purchases or related expenses.

Is it possible to claim ITC on expenses for club memberships?

No, ITC cannot be claimed for club memberships, especially when they are used for personal purposes by directors, partners, or proprietors.

Can businesses claim ITC for meals at restaurants?

No, ITC cannot be claimed on expenses related to meals at restaurants or any other food-related expenses, even if they are incurred for business meetings.

What about health treatments for directors or partners—can ITC be claimed?

No, ITC cannot be claimed for health treatments taken by directors, partners, or proprietors, as these are considered personal expenses.

Can ITC be claimed for motor vehicle repair and maintenance?

No, ITC cannot be claimed for the repair and maintenance of motor vehicles, unless the vehicle is directly involved in the business operations.

What is the treatment for personal consumption expenses regarding ITC?

ITC cannot be claimed for personal consumption of goods or services. Any personal expenses, such as beauty treatments or personal travel, are not eligible for ITC.

How should businesses reverse ineligible ITC claims?

Ineligible ITC should be reversed on the GST Portal by identifying non-eligible expenses and adjusting them in the relevant columns of the GST returns (GSTR-3B). This ensures that unclaimed ITC does not appear in your filings.

Is ITC allowed on non-GST goods such as petrol or diesel?

No, ITC cannot be claimed on non-GST goods like petrol and diesel, as these are not subject to GST.