Section 17 - Apportionment of credit and blocked credits.

Input tax credit apportionment limits recoverable credit to business and taxable use, with a banking-sector monthly option.

Input tax credit is limited to the portion attributable to business or taxable supplies; exempt supplies (including reverse charge supplies, securities transactions and sale of land/building) are treated as prescribed for apportionment. Banks and financial institutions supplying deposit or loan services may elect a monthly limited-claim mechanism for eligible credit, binding for the financial year, with an exception for supplies between registrants sharing the same PAN. A detailed list of blocked credits is specified (vehicles, certain services and supplies, construction-related inputs excluding plant and machinery, composition-taxed supplies, non-resident receipts, personal consumption, losses/gifts, and certain tax recoveries), and the Government may prescribe attribution methods; 'plant and machinery' receives a specific functional definition.