GST is printed. That doesn't make the factory expense ITC-eligible.

What did the factory actually buy?

A contractor's invoice says repair work. The purchase file describes a new building extension. Those words lead to a question no arithmetic check can settle: what is the actual nature of the expenditure, and how does the law treat it?

I would keep the invoice unchanged while opening that question. Do not rename the expense to make a tax outcome feel easier. The source document, work order and accounting treatment need to be read together.

Section 17 of the CGST Act restricts credit in specified circumstances; Section 17(5) lists blocked-credit categories and exceptions. Section 16's general conditions still matter. A valid invoice is a necessary part of many claims, not the entire eligibility decision.

This is a handoff guide for a manufacturing AP desk. It is not a list of expenses you should automatically claim or automatically reverse. Current amendments and relevant decisions can change the analysis, especially for construction and related expenditure.

The canteen folder needs more than a menu

Take a fictional bill for food supplied at the factory. The invoice names the supplier, lists the tax and gives a payable amount. It may not say whether the employer is obliged under applicable law to provide the facility, who bears the cost or what the contractual arrangement covers.

Those facts can matter when the reviewer considers Section 17(5) and its exceptions. “Food means blocked” is too blunt. “Factory canteen means eligible” is equally blunt. Neither statement does the legal work for your facts.

AP can obtain the agreement, the relevant internal policy and the basis for any claimed statutory obligation. Record how the facility is used and whether recoveries from employees are involved. Your reviewer decides which facts affect the treatment; do not invent them from the supplier's SAC.

If nobody can supply the legal basis for an asserted obligation, write that gap plainly. A note reading “mandatory canteen” without a reference is an assertion, not evidence. The person preparing the return should see the uncertainty before credit is treated as settled.

The building folder needs the work order

A phrase such as maintenance, fabrication or installation does not establish whether a supply relates to a building, immovable property or qualifying plant and machinery. Read the actual scope of work. The invoice shorthand may be a poor description of what was built.

Keep the work order, drawings where relevant and the accounting/capitalisation decision available to the tax reviewer. The distinctions in Section 17(5), its explanations and applicable law should be assessed against those facts.

Do not use a supplier's HSN to decide the whole project. A hardware line can sit within a larger construction contract. The invoice classification is a piece of evidence, not the entire context.

Likewise, a factory location does not make every structure plant and machinery. Nor does the word construction decide every case against credit. Avoid categorical conclusions until the reviewer has checked the current statutory wording and relevant decisions.

This is why the HSN format check is narrow. It checks the shape of the code as shipped; the directory is shadow by default. It does not determine whether this expenditure falls within a credit exception.

Write the question beside the amount

A useful review card begins with the invoice identity and a short description of the actual purchase. Then it lists the potentially relevant restriction, the evidence supporting any exception and the remaining factual question. Keep the legal conclusion for the responsible reviewer.

For a vehicle purchase, bring the actual vehicle and intended-use details, not just a vendor category called transport. The Act's vehicle provisions and exceptions are more specific than that master label. A generic category cannot decide every car, goods vehicle or transport-related expense.

The review should be dated and tied to the invoice or defined expenditure category. A decision on one canteen agreement should not be silently applied to a different contract next year. Changes in use or law need another look.

If the outcome remains open, keep it open in the working. “Pending tax review” should not be converted to “eligible” because the month-end deadline is close. Escalate the decision to the person authorised to make it.

Link the card to the general Section 16 evidence and the 2B reconciliation. An expense can satisfy one part of the process while failing another. The files should make those distinct decisions visible.

What EntryLedger can honestly establish

EntryLedger extracts a supplier invoice and checks required fields, GSTIN checksums, HSN format, arithmetic and regime consistency, with other shipped fail-closed safeguards. It cannot establish all the off-page facts in the canteen or building file.

It does not classify an expense as ITC-eligible, verify that the supplier paid tax or perform live GSTN checks. A checksum-valid identity is not proof of registration status. A prepared export is not a statutory approval.

Human confirmation records a deliberate review of the entry. It does not waive the law or turn an unsupported eligibility claim into a documented exception. The validation page describes the document checks; your tax file carries the rest.

Where the material issue is legal rather than optical, another model read adds little. The same tax row will still be there. Spend the effort on the missing work order or contractual fact instead.

Before the next close, choose one expense whose eligibility everybody assumes. Ask where the supporting decision is recorded. If the only answer is “we always claim it,” start the review card.

AP records guide, not personalised tax or legal advice. Official source wording checked on 12 October 2026. Have your CA or responsible adviser apply the effective law to your facts before a statutory payment decision or return adjustment.