Question
Is input tax credit blocked on cars and other items under Section 17(5)?
Answer
Bottom line: Yes — Section 17(5) blocks ITC on motor vehicles with up to 13 seats and several other items, unless you fall in a specific exception.
1. Motor vehicles
ITC on cars (seating capacity up to 13, including the driver) is blocked, except when you are in the business of selling vehicles, transporting passengers, or driving training.
2. Other blocked items
Food and beverages, outdoor catering, health services, club memberships, and works-contract or construction of immovable property on your own account.
3. Exceptions
Credit is allowed where the input is used to make the same category of outward supply.
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This answer is general information based on the law as it stood when written and is not professional advice on your specific situation. Verify the current position and consult a qualified professional before acting. See our disclaimer.