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Blocked Credit under Section 17(5) Working Paper — GST

Every Section 17(5) blocked-credit category tested against the entity's actual expenses — motor vehicles, food & beverages, works contract, club memberships and more — with the exceptions that take a category OUT of the block.

Free · CORAA original — SA-aligned
Updated 28 Jul 2026
Basis
Section 17(5), CGST Act 2017
Approach
Category-by-category test, exceptions checked before concluding blocked
Common miss
Motor vehicle / works-contract exceptions not tested before blocking
Format
Microsoft Word (.docx)
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Engagement details
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What’s inside

An excerpt from the template.

BLOCKED CREDIT UNDER SECTION 17(5) WORKING PAPER

Entity: ___ · GSTIN: ___ · Financial year ended: ___

Purpose: test every Section 17(5) blocked-credit category against the entity's actual expenses for the year, note where an exception takes the expense OUT of the block, and total the ITC that must be reversed/not claimed.

Exceptions to keep in mind (each takes the category OUT of the block)

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About this template

What you’re downloading, and when to use it.

This template follows the format published by the Institute of Chartered Accountants of India (ICAI) in the AASB Audit Working Paper Templates (June 2023), the authoritative reference for Indian statutory-audit documentation. Fill in your firm’s letterhead and the engagement details on the form above, click Download Word file, and you’ll get a fully formatted .docx ready to use.

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Common questions

FAQs.

Is ITC on all motor vehicle expenses blocked under Section 17(5)?
No — only for motor vehicles for transport of persons with seating capacity up to 13 (including the driver), and only when NOT used for further supply of such vehicles, passenger transportation service, or driving training. Vehicles above that seating capacity, and vehicles for transport of goods, are outside this specific block entirely (though other general ITC eligibility conditions still apply).
Why test exceptions before concluding a category is blocked?
Several Section 17(5) categories have a "supply of the same category" or "obligatory under law" exception that is easy to miss — e.g. a company legally required to provide canteen facilities to a certain employee-strength factory may be able to claim ITC on food & beverages that would otherwise be blocked. Concluding "blocked" without testing the exception risks understating eligible ITC, not just overstating it.
Does blocked credit under Section 17(5) need to be reversed, or simply not claimed?
If the ITC was never claimed, it is simply excluded from the credit ledger. If it was claimed in error in an earlier period and later identified as blocked, it must be reversed with interest under Section 50, typically via Table 4(B) of GSTR-3B for the period the error is identified, not by revising the original return.
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