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2019 (7) TMI 844 - AAR - GSTInput tax credit - capital goods - Motor Vehicle purchased for demonstration purpose - credit availed on Capital Goods and set off against output tax payable under GST - HELD THAT:- The availability of input tax credit shall be subject to the provisions of section 18(6) of the GST Act. In the case of supply of capital goods on which input tax credit has been taken the register person shall pay an amount equal to the input tax credit on the said capital goods reduce by such percentage of points as may be prescribed or the tax on transaction value of such capital goods determined as value of taxable supply, whichever is higher. In the instant case, the applicant purchases demo vehicles against tax invoices from the supplier after paying taxes. The demo vehicle is indispensable tools for promotion of sale by providing trail run to the customer. The applicant capitalizes the purchase of such vehicles in the books of accounts. The capital goods which are used in the course or furtherance of business is entitled for Input Tax Credit. The Input Tax Credit on the Motor Vehicle purchased for demonstration purpose can be availed as Input Tax Credit on Capital Goods and set off against output tax payable under GST.
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