Page 17 - Ch_10 ITC

6 GST paid on health - ITC is blocked u/s 17(5) of CGST Act on health

insurance policies insurance taken for employees except when there is a
statutory obligation on employer to provide the same.

Total ITC Available 10,50,000

CCP 10.07.25.0

Jamku Ltd., a registered person, is engaged in the business of spices. It provides following details in
relation to GST paid on inward supplies procured by it during the month of October.
S.No. Particulars GST (₹)

1 Raw spices purchase
- Raw spices sold to customers 50,000
- Raw spices used for personal use of directors 20,000
2 Electric machinery purchased for being used in the manufacturing process 25,000
3 Motor vehicle used for transportation of the employee 55,000

4 Payment made to contractor for construction of staff quarter 1,25,000
Determine the amount of ITC that can be availed by Jamku Ltd. for the month of October by giving the
necessary explanation for treatment of various items. Subject to the information given above, all the
other conditions necessary for availing ITC have been fulfilled. [Study Mat]

Answer:
S.No. Particulars ITC (₹) Explanation
1 Purchase of raw spices which are 50,000 ITC is available on goods used in the course or
sold to customers furtherance of business u/s 16(1) of CGST Act.

2 Purchase of raw spices for Nil ITC is blocked on goods used for personal consumption
personal use of directors (i.e. non business use) u/s 17(5)(g) of CGST Act.
3 Electric machinery purchased for 25,000 ITC is available on goods used in the course or
being used in the manufacturing furtherance of business u/s 16(1) of CGST Act.

process
4 Motor vehicle used for Nil Since the supplier is in the business of spices, ITC on
transportation of employee motor vehicle used for transportation of the employee
is blocked u/s 17(5).

5 Payment made to contractor for Nil ITC is blocked on works contract services supplied for
construction of staff quarter construction of an immovable property except where it
is an input Service for further supply of works contract
service u/s 17(5)(c).

Total ITC 75,000

CCP 10.07.26.00
Dina Ltd., a registered supplier from Maharashtra, is engaged in the manufacture of passenger autos.
The company provides the following details of purchases made/services availed by it during the month
of March:

S.No. Particulars GST (`)

1 Purchase of iron which is used as a raw material [Goods were received in two instalments 2,50,000
- first in March and the second in April]

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