The Commercial Tax Department, Govt. of Tamil Nadu on September 30, 2026, issued an amendment to the older notification stating Restriction on Input Tax Credit and Amendments to Service Classification.
The following has been stated:
• The Government has amended Notification No. II(2)/CTR/532(d-14)/2017 dated June 29, 2017, with effect from October 20, 2023.
• The amendment restricts input tax credit (ITC) on input services procured from suppliers operating in the same line of business, where the supplier charges State GST at a rate higher than 2.5%. In such cases, the recipient supplying the same category of service at 2.5% GST cannot claim ITC exceeding the amount calculated at 2.5% on the value of the input service. For example, where a motor cab operator pays 6% GST on an input service but charges its customer GST at 2.5%, ITC is restricted to 2.5% of the input service value.
• The notification also amends the description of services under serial number 34 by replacing the words “totalisator or a license to” with “licensing a” and omitting item (v) and its related entries. Further, serial numbers 696 and 698, along with their corresponding entries, are deleted from the Annexure containing the Scheme of Classification of Services.
[Notification No. - G.O. Ms.No.139]
