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ITC on travel expenses

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Input tax credit (ITC) means taxes paid on purchases of goods or services can be claimed at the time of payment of taxes on output. Businesses can get credit for the GST that they spend on various expenses. Let’s look at issues related to GST credit on travelling expenses.

Availability of ITC on travelling expenses

  • ITC is not available for expenses incurred for personal travel. It is only available for travel done for business purposes to carry out a specific business activity.
  • ITC is not available in the case of travel, benefits extended to employees on vacation such as leave or home travel concession.
  • Travel on train/airline for business purposes will lead to payment of GST. This can also be claimed as input credit.

ITC on travelling expenses

Conditions for claiming GST credit on travel expenses

  1. A claimant must be registered in the GST regime.
  2. Possession of GST invoice or debit note issued by the registered vendor. 
  3. Relevant GST returns have been filed. 
  4. Tax paid on expenses has been deposited by the vendor to the government.
  5. Expenses must be incurred for business purpose.
  6. Purchase must not be covered under blocked credit.

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CA Anand Singh

CA Anand Singh

I am a practising Chartered Accountant with 6 years of experience in Direct and Indirect Taxation, FEMA, Corporate Law and Audit etc.