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Regarding Input Tax Credit, Goods and Services Tax - GST

Issue Id: - 113614
Dated: 12-4-2018
By:- Prateek Agrawal
Regarding Input Tax Credit

  • Contents

As I am registered dealer under GST Act. and having business of motor vehicles . For demo purpose I issued invoice in the name of firm i.e.self . whether the input credit is available or not . The same is showing in books of account under the hade fixed assests .

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Showing Replies 1 to 6 of 6 Records

1 Dated: 12-4-2018

ITC can be taken .

2 Dated: 12-4-2018
By:- Ganeshan Kalyani

Raising an invoice on demo basis will not make you eligible to take credit. This is my view.

3 Dated: 12-4-2018

We endorse the views of the experts.

Please check the point No. 3 of the appended link.


4 Dated: 13-4-2018

Dear Querist,

Pl. go through the following extracts before taking final decision:


Under GST, how to send demonstration equipment and instruments to customers or branch offices with in India on returnable basis? - No sale is involved.

As the goods are sent on returnable basis and no transfer of title is involved, it is not a supply of goods. If some element of service is involved, the same will be a taxable supply. The goods may be sent on delivery

In terms of Section 16 of the CGST Act, 2017 ITC is allowed on goods and services which are inputs for the supplier and hence Motor Vehicle is eligible goods for taking ITC. But Section 17 (5) of CGST Act, 2017 imposes some restrictions or conditions which are as under :-

_____________________ no ITC shall be allowed in respect of motor vehicle and other conveyances except when they are used-
(i) for making the following taxable supplies, namely:-
(A) further supply of such vehicles or conveyances; or
(B) transportation of passengers; or
(C) imparting training on driving, flying, navigating such vehicles or conveyances;
(ii) for transportation of goods.

5 Dated: 13-4-2018

Procedural lapse cannot override your substantive right of ITC. If you fight legally you would get benefit. Your substantive right cannot forfeited just because you have issued invoice instead of delivery challan for demo purpose.

If you pay tax by bona fide mistake, can you not claim refund ?

So, situation being entirely different, you can get GST paid back either by way of refund or ITC. It is adjustment of wrongly paid tax.

6 Dated: 22-4-2018
By:- BalKrishan Rakheja

I think there is no bar to take ITC as the Demo vehicle is being used for furtherance of his business. In fact if the vehicle is being used by the dealer for Demo purpose then there was no need to issue invoice for self. This is my view.


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