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Blocked input tax

Blocked input tax refers to input tax credit that you cannot claim.

Under GST, businesses are allowed to claim GST incurred on purchase of most goods and services.

GST paid on some purchases are however "blocked", which means that the business cannot claim credit for it when submitting their monthly or quarterly GST returns.

Examples of items that fall in this category include:

  • Purchase of a passenger motor car
  • Hire of a passenger motor car
  • Repair, maintenance and refurbishment of a passenger motor car
  • Club subscription fee
  • Medical and personal accident insurance premium
  • Medical expenses (for example, purchase of a wheel chair as a medical benefit for an employee)
  • Family benefits
  • Entertainment expenses, except those incurred in entertaining employees or existing customers (a valid tax invoice is required)

The tax paid on the purchase of such items would therefore be an expense to the business

The tax code for Blocked Input Tax is BL


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