ICAI Releases ‘Handbook on Blocked Credit under GST’ November 2025 Edition
The publication elaborates on the circumstances where ITC cannot be availed on procurements and clarifies interpretational aspects with the help of relevant legal references and judicial pronouncements.
The Goods and Services Tax (GST) Act, now eight years into implementation, has evolved into a central pillar of India’s indirect tax architecture. Since its rollout on 1 July 2017, GST has replaced a fragmented system of multiple indirect levies with a unified, destination‑based tax framework designed to eliminate cascading and streamline compliance. Over the years, the system...
The Goods and Services Tax (GST) Act, now eight years into implementation, has evolved into a central pillar of India’s indirect tax architecture. Since its rollout on 1 July 2017, GST has replaced a fragmented system of multiple indirect levies with a unified, destination‑based tax framework designed to eliminate cascading and streamline compliance.
Over the years, the system has matured through policy refinements, digital integration, and technology‑driven oversight, strengthening transparency, efficiency, and revenue mobilisation.
Against this backdrop of continuous evolution, the GST & Indirect Taxes Committee of the Institute of Chartered Accountants of India (ICAI) has released the second edition of the “Handbook on Blocked Credit under GST,” updated till 10 November 2025.
The publication aims to serve as a practical, structured guide for professionals navigating the complex domain of input tax credit (ITC) restrictions under Section 17(5) of the Central Goods and Services Tax Act, 2017.
In his foreword, ICAI President CA. Charanjot Singh Nanda highlights GST’s transformative impact on business processes and tax administration. He notes that the regime’s success has been reinforced by digital advancements and compliance‑driven reforms that have simplified procedures for taxpayers.
The President commends the Committee for its proactive role in capacity‑building through certification courses, workshops, conferences, live webcasts, and e‑learning modules, as well as through the development of technical publications that enhance professional competence.
The revised handbook, he observes, provides a lucid explanation of the statutory provisions governing blocked credits, elaborating on situations where ITC is restricted and clarifying interpretational issues through legal references and judicial precedents.
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He expresses confidence that the publication will be a valuable resource for practitioners and industry professionals seeking to strengthen their understanding of ITC eligibility and compliance.
The Preface, authored by CA. Rajendra Kumar P, Chairman, and CA. Umesh Sharma, Vice‑Chairman of the GST & Indirect Taxes Committee, underscores the centrality of ITC in ensuring seamless credit flow within the GST framework.
While ITC is a foundational feature enabling tax neutrality, Section 17(5) reflects the legislature’s intent to restrict credit to genuine business‑related expenses and prevent misuse for personal or non‑core activities.
As the scope of blocked credits continues to evolve through amendments and judicial interpretation, staying updated becomes essential for avoiding disputes and penalties.
The second edition incorporates the latest statutory changes, notifications, and case law developments up to November 2025.
The Committee acknowledges the contributions of CA. Akshay M. Hiregange and CA. Sreenivasulu Thulasiram for revising the publication, and CA. Upender Gupta, Former Chief Commissioner, Customs & Indirect Taxes, for reviewing it. The Secretariat’s support, particularly from CA. Tanya Pandey, is also recognised.
The handbook is structured into 13 chapters covering the meaning of ITC, conditions for eligibility, apportionment rules, and detailed analysis of blocked credits across specific categories such as motor vehicles, food and beverages, insurance, club memberships, employee‑related supplies, construction of immovable property, personal consumption, and goods lost or written off.
It also addresses ITC implications on tax paid under Section 74 and other miscellaneous restrictions.
ICAI encourages readers to share feedback and report any inadvertent errors to gst@icai.in, reinforcing its commitment to continuous improvement and stakeholder engagement. The publication is positioned as a timely and authoritative reference for the tax fraternity, contributing to better compliance and informed professional practice in the evolving GST landscape.
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