Itc

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ashishagarwal (Querist)
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18 February 2018 A person is running dairy farm business....he carries his own goods by a motor vehicle to trasport for sale of milk
Whether it will be considered as transportation of goods nd eligible for purpose of ITC?

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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18 February 2018 You have not paying any GST on transport ation question of ITC not arise

ashishagarwal

ashishagarwal (Querist)
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20 February 2018 I wanted to ask that as we do not get itc on motor vehicles u/s 17 of cgst act....but in case of transportation of good we get the credit....so is it specifically for goods transport agency or for anyone who is using motor vehicle for transportation of his own goods from one place to another for e.g i owned a motor vehicle which i use for making delivery of goods to customer place....than in that case would i be able to get itc

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Asha Kanta Sharma online

Asha Kanta Sharma

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02 August 2024 In the context of the Goods and Services Tax (GST) regime in India, the eligibility for Input Tax Credit (ITC) on transportation expenses, including the use of motor vehicles, is governed by specific provisions. Here's how it applies to your scenario:

### ITC on Transportation of Goods:

1. **General ITC Provisions:**
- **Section 17(5) of the CGST Act:** This section outlines the restrictions on ITC claims. It generally prohibits the ITC on motor vehicles used for transportation unless specific conditions are met. However, it does allow ITC for transportation-related expenses under certain circumstances.

2. **ITC on Transportation of Goods:**
- **Rule 37 of CGST Rules:** This rule specifies that ITC can be claimed on goods transport services if the recipient of the goods is responsible for paying the tax under reverse charge (i.e., the recipient pays the GST on the transportation services).

### Specific Case: Transportation by Own Motor Vehicle

- **Own Motor Vehicle for Transportation:**
- If you are using your own motor vehicle for transporting goods (e.g., milk) to customers, the vehicle's cost and maintenance expenses are generally **not eligible** for ITC under Section 17(5), which excludes ITC on motor vehicles used for personal use or transportation of own goods.

- **ITC Eligibility for Transportation Services:**
- If you incur expenses on hiring transport services (like hiring a Goods Transport Agency or a third-party transporter), you can claim ITC on the GST paid for those services, provided the transportation service is used for the supply of goods or services.

### Summary:

1. **ITC on Own Motor Vehicles:**
- You cannot claim ITC on the purchase, maintenance, or running expenses of motor vehicles used for transporting your own goods due to the restrictions under Section 17(5).

2. **ITC on Goods Transport Services:**
- If you are hiring a transport service or a Goods Transport Agency for delivering goods and are paying GST on those services, you can claim ITC on the transportation charges, as long as the transportation service is used for the supply of goods or services.

### Example Scenario:

- **Scenario A:** If you own a motor vehicle and use it to transport milk from your dairy farm to the customers, you cannot claim ITC on the vehicle itself or its running costs.

- **Scenario B:** If you hire a third-party transport service to deliver milk, you can claim ITC on the GST paid to the transport service provider.

### Practical Steps:

- **Maintain Documentation:** Ensure you maintain proper documentation for any transport services you hire and the corresponding GST invoices to support your ITC claims.

- **Consult a Tax Professional:** For precise advice and to ensure compliance with GST regulations, consulting a tax professional or GST consultant can help navigate complex situations and ensure accurate ITC claims.

Feel free to ask if you have any more questions or need further clarification!