Itc on motor vehicle

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 December 2018 Sir / Madam, I want to know that can I take GST Input credit on Purchase Eicher Motor for a Business Purpose ?
My firm is proprietorship firm. Nature of business is Event Management. So I use eicher motor to take the music instruments
to event places.

SHUBHAM SHARMA

SHUBHAM SHARMA (Expert)
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22 December 2018 Sir,
As the conveyance is being used for transportation of goods ...Hence in my humble opinion you can take the credit of the same.
Thanks and regards
CA Shubham Sharma
Contact no.-9462302922
Email-shubham.vnv@gmail.com

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)
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22 December 2018 In my opinion even if it is for business purpose you do not seem to fulfill conditions for availing ITC on motor vehicle under section 17(5) as you are not dealing in music instruments i.e. trading so from that point of view transportation of goods will not come to your rescue.

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Querist : Anonymous

Querist : Anonymous (Querist)

22 December 2018 section 17(5) Examples where credit of motor vehicles can be availed: Dealer of vehicles, cab providers, trucks/vehicles used by factories for transportation of goods.
Client used Eicher motor for purpose of business i.e. carry his music instruments for event places.

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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02 August 2024 Under the GST regime, the ability to claim Input Tax Credit (ITC) on motor vehicles is subject to specific conditions and restrictions. Here's a detailed explanation based on your scenario:

### **ITC on Motor Vehicles:**

#### **General Rule:**
- **Section 17(5) of the CGST Act** lays down the restrictions on ITC for motor vehicles. It generally disallows ITC for motor vehicles unless used in specific scenarios.

#### **Conditions for Availing ITC:**

1. **Motor Vehicles for Transport of Goods:**
- ITC is allowed on motor vehicles used for transportation of goods. This includes trucks, lorries, and similar vehicles used for transporting goods from one place to another.
- **Section 17(5)(a)(B)**: ITC is available for motor vehicles used for transporting goods or passengers if the business involves supply of such vehicles (e.g., dealers of motor vehicles, taxi services).

2. **Motor Vehicles Used for Business Purposes:**
- ITC is allowed on vehicles used for the business of transportation of goods or passengers, such as those used in the supply chain or for carrying goods to clients.

#### **In Your Case:**

- **Nature of Business:** Event Management
- **Vehicle Purchase:** Eicher Motor used to transport music instruments to event locations.

#### **Eligibility for ITC:**
1. **Purpose of Vehicle Use:**
- Since your firm uses the Eicher motor vehicle to transport music instruments (which are business assets) to event locations, the vehicle is used for a business purpose.
- ITC on motor vehicles used for transportation of goods is eligible, and since your event management business involves transporting equipment, this should fall under the eligible category.

2. **Restrictions and Exceptions:**
- **Section 17(5)(a)(B)** specifies that ITC can be claimed on motor vehicles used for business purposes related to transportation. Ensure that the vehicle is used exclusively for business operations.
- **Condition:** Ensure that the vehicle is used primarily for business and not for personal purposes, and maintain proper documentation to support the ITC claim.

#### **Practical Steps:**

1. **Documentation:**
- Maintain all invoices related to the purchase of the motor vehicle.
- Ensure the vehicle is used exclusively for business operations.
- Keep records of how the vehicle is utilized for transporting goods and services related to your business.

2. **Claiming ITC:**
- Ensure that the GST paid on the purchase of the vehicle is accurately reflected in your GST returns.
- Claim ITC in the GST return for the period in which the vehicle was purchased.

### **Conclusion:**

You can claim ITC on the purchase of the Eicher motor vehicle used for transporting music instruments to event locations, as it is used for your event management business. Ensure compliance with the conditions specified under **Section 17(5)** and maintain proper documentation to support your ITC claim.

For specific advice tailored to your situation, consider consulting a tax advisor or GST consultant.