Section 17 - Apportionment of credit and blocked credits

Input Tax Credit apportionment: restrict credit to business and taxable supplies; banks may opt a monthly simplified mechanism.

Input tax credit must be apportioned to the extent inputs are used for business and for taxable supplies (including zero rated), with exempt supplies (including reverse charge supplies) excluded; banking and financial institutions may elect a monthly simplified attribution mechanism for a financial year. Specific categories are blocked from credit, notably most motor vehicles except where used for further supply or transportation of goods or passengers, certain personal and welfare services unless used to make outward supplies of the same category or notified as employer obligatory, works contracts and construction of immovable property other than plant and machinery, supplies taxed under section 9, personal consumption, lost or gifted goods, and taxes paid under specified provisions. Government may prescribe attribution methodology.