22 April 2023
Sir, Section 17(5) of CGST Act, 2017 deals with cases where ITC has been blocked.
Clause (a) of sub-section (5) of section 17 of CGST Act, 2017 is reproduced for ready reference:
(a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely:-
(A) further supply of such motor vehicles; or
(B) transportation of passengers; or
(C) imparting training on driving such motor vehicles;
Therefore, based on above, if you are in a business where you are buying motor car for the purpose of providing services of transportation of passengers, then only you can avail ITC. Service of providing vehicles on rent seems not covered here, so ITC will not be allowed.
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