TMI BlogITC credit eligibility on commercial vehiclesX X X X Extracts X X X X X X X X Extracts X X X X ..... I run a Multistate cooperative society in which I'm purchasing commercial vehicle with ITC of 8 lakhs where I'll be advertising my institution loans and interest rates So will I be eligible for ITC on this vehicle purchase? - Reply By Kiran Tahelani - The Reply = Section 17(5) restricts only motor vehicle for transportation of passengers (13 or less seats) not on other vehicles. in my ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view yes. but wait for others to reply. - Reply By GUNASEKARAN K - The Reply = According to Section 17(5) (a) of CGST Act , input tax credit is not available on motor vehicles used for transportation of persons having approved seating capacity of less than thirteen persons, this includes the seat of the driver. At the same time, if such motor vehicles are used for making the following ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xable supplies, input tax credit is available: 1. Further supply of such motor vehicles the registered person is in the business of selling such motor vehicles 2. Transportation of passengers the registered person is in the business of transport services of passengers 3. Imparting training on driving such motor vehicles the registered person is in the business of providing training ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on driving by using such motor vehicles. Also Section 17(5) (ab) of CGST Act , denies input tax credit on the services of general insurance, servicing, repair and maintenance for the motor vehicles having seating capacity of less than thirteen. At the same time input tax credit is available on the services related to motor vehicle insurance, repair and maintenance of such vehicles if they ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e used for the purposes mentioned in the Points 1, 2 3 as above. Apart from the points 1, 2 3 above, ITC is available on the services of general insurance, servicing, repair and maintenance as received by a taxable person engaged in the manufacture of such motor vehicles or who is involved in the supply of general insurance services in respect of such motor vehicles. In your case, the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehicle is used for outdoor advertising purpose to promote your institution's services. The Promotional Products / Materials Marketing items used to promoting your brand marketing your products / services can be considered as inputs as defined in Section 2(59) of the CGST Act, 2017 . However, the GST paid on the same cannot be availed as input tax credit in view of the provisions of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 17(2) and Section 17(5)(h) of the CGST Act, 2017 . This is my ex facie view and the same should not be construed as professional advice or suggestion. - Reply By Padmanathan Kollengode - The Reply = By commercial vehicle, I am assuming it is not passenger vehicle blocked under section 17(5)(a) . I beg to differ with the view that ITC is blocked under section 17(5)(h) as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non of the situation contemplated in that clause is attracted here. But I agree that apportionment of credit will be required under Section 17(2) read with Rule 42 / 43 . Also pls check if the option under section 17(4) has been exercised, in which case only 50% of ITC can be availed. - Reply By Shilpi Jain - The Reply = Agree that credit is eligible and not blocked u/s 17(5) (ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uming not a passenger vehicle =13 seater). Though if this is a financial institution then either provisions of rule 43 can be applied and credit proportionate to the exempt income can be reversed every year. Else as per s 17(4) 50% of the credit can be availed. - Reply By KALLESHAMURTHY MURTHY - The Reply = The Querist has not mentioned the type of vehicle purchased. Considering the nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of the business, it can be assumed that it is a 4-wheeler. He is eligible for ITC if it is purchased in the name of the Society and is capitalised in the books of accounts used in the course of furtherance of business. If exercised option u/s 17(4) , eligible to avail 50% of the ITC amount. The use of the car for personal work attracts Sec. 17(2) . Hence needs to maintain a log book. Further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , eligibility for ITC is subject to the provisions of Rule 42 which provide reversal of ITC for personal use and as per Rule 43 (1)(c) , the useful life of the vehicle is 5 years. The procedure laid down therein is to be followed. - ITC credit eligibility on commercial vehicles - Query Started By: - VEKIT SHETTY Dated:- 12-9-2023 Last Replied Date:- 21-9-2023 Goods and Services Tax - GS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T - Got 5 Replies - GST - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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