GSTAT says GST ITC on merchandise stock insurance is not blocked
In short
GSTAT said GST input tax credit on insurance for merchandise stock is not blocked under Section 17(5) of the CGST Act.
The ruling matters for businesses that insure inventory, because it supports claiming credit on that insurance cost.
What the reporting says
GSTAT said insurance of merchandise stock is not covered by the blocked-credit restriction under Section 17(5) of the CGST Act. The ruling, as summarized by Taxscan, distinguished this insurance from blocked-credit categories for certain motor vehicles, vessels and aircraft. The decision supports input tax credit treatment for businesses insuring inventory, subject to the order’s scope.
Why it matters
GSTAT ruled that insurance of merchandise stock falls outside the blocked-credit rule in Section 17(5) of the CGST Act. The order is relevant for businesses that purchase stock insurance and want to claim GST input tax credit on that expense.