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2021 (1) TMI 692 - AAR - GSTInput tax credit (ITC) - Demo vehicle purchased - whether credit can be availed as the same will he capitalized in books - HELD THAT:- The Applicant has submitted that the firm will not claim depreciation on the tax component of Demo Vehicles which are capitalized in the books of accounts. We find that not charging depreciation on the tax component, is as per other relevant provisions of the GST Act. But. that can not affect the applicability of provisions of Section 17(5)(a) of GST Act according to which the applicant is not eligible for Input tax credit on Demo Vehicles. as the same arc not covered by any of the exceptions given clause (A). (B) or (C) of Sec. 17(5)(a) - It is found that the eligibility for inputs tax credit on Demo Vehicles can not he decided on the basis of their capitalisation. or payment of GST at the time of their sale in the subsequent year. There is clear provision in law for admissibility of Input tax credit on motor vehicles in any of' the three conditions prescribed in clause (A), (B) and (C) of Section 17(5)(a) of GST Act. As the applicant's Demo vehicles do not comply any of the said conditions. therefore. the applicant is not eligible for Input tax credit on Demo vehicles in view of provisions of Section 17(5)(a) of GST Act in spite of the filet that the Demo Vehicles are used by the applicant for furtherance of their business.
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