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2022 (2) TMI 239 - AAR - GSTInput tax credit of - rent-a-cab services - GST paid under Reverse Charge Mechanism - hiring of buses for transportation of employees - inward supply - applicability of bar created by Section 17 (5) of GST Act, 2017 - HELD THAT:- As per the Notification no. 22/2019-Central Tax (Rate) dated 30.09.2019 w.e.f. 01.10.2019, M/s N.B.S. Travel providing the bus service is not required to levy G5T (since it is not a body corporate) when it is paying G5T @ 5%. The Applicant, being the service recipient is liable to discharge GST under Reverse Charge Mechanism - From the notification it is clear that notification restricts the availability of ITC un less the supplier is in same line of business. But the heading of this column number three is very clear that it applies to the supplier of said service and not to the recipient of serv ice. In the present case, the applicant is the recipient of service and not the supplier of said service. So said words shall not affect the case of the applicant here. Here, the applicant is receiving the bus service from M/s N.B.S. Travels. Thus, as per the Notification no. 29/2019-Central Tax (Rate) dated 31.12.2019, M/s N.B.S. Travel providing the bus service is not required to levy GST (since it is not a body corporate). It does not issue an invoice charging central tax at the rate of 6 per cent. to the service recipient i.e. the applicant. The Applicant, being the service recipient is liable to discharge GST under Reverse Charge Mechanism. Whether applicant is entitled to avail Input tax credit (ITC) of GST charged on such inward supply? - Chapter V of the CGST Act, 2017 - HELD THAT:- Section 16 of the CGST Act, 2017, contains provisions with respect to eligibility and conditions for taking ITC. As per Section 16 (1), every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in Section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business. Hence, ITC in respect of receipt of services is available and can be taken, subject to such conditions and restrictions and in the manner specified in Section 49 of the CGST Act - in the subject case, the supply of services received by the applicant is used in the course or furtherance of their business and therefore prima facie, they are eligible to take credit of GST charged by their suppliers. Whether Section 17 (5) of the said Act debars the applicant from taking credit? - HELD THAT:- Section 17 (5) had clearly debarred Input Tax Credit on motor vehicles or conveyances used in transport of passengers till the date of the amendment i.e. 01.02.2019. However with effect from 01.02.2019, Input Tax Credit has been allowed on leasing, renting or hiring of motor vehicles, for transportation of persons, having approved seating capacity of more than thirteen persons (including the driver) - In the instant case, the bus service availed by the Applicant is 49-seater i.e. more than 13 seater. Accordingly, the same is not falling under the block credit as provided under section 17 (5) of CGST Act 2017 and, therefore, in the instant case, (since the applicant is utilizing the services of renting of motor vehicle for business or furtherance of business), the input tax credit is not restricted to the applicant under the referred Section 17(5) of CGST Act 2017. The applicant would be eligible for ITC but only with effect from 01/02/2019 only.
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