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Electric veichle

20 February 2024

Can we claim input on purchase electric vehicle for business and personal use please elaborate section and treatment of such type of transaction in gst

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5 Replies

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 20 February 2024

No, ITC is ineligible as per sec 17 (5)....

The ITC is Reversible in GSTR 3b return...

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CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 20 February 2024

Agreed with RAJA Sir

sabyasachi mukherjee (27574 Points)
Replied 20 February 2024

Business and personal cannot be clubbed

Money Money (413 Points)
Replied 22 February 2024

It seems like you are asking about the input tax credit (ITC) on the purchase of an electric vehicle (EV) for business and personal use under the Goods and Services Tax (GST) regime in India. I will try to explain the relevant provisions and conditions as per the GST law and rules.

As per Section 17 (5) of the CGST Act, ITC is not available on the purchase of motor vehicles and other conveyances, except when they are used for making further supply of such vehicles or conveyances, or for transportation of passengers, or for imparting training on driving, flying, or navigating such vehicles or conveyances, or for transportation of goods1.

However, the GST Council has recommended a special dispensation for EVs, whereby ITC will be available on the purchase of EVs for all GST registered persons, irrespective of the purpose of use2. This means that you can claim ITC on the purchase of an EV for both business and personal use, subject to the following conditions:

The EV must be a plug-in electric vehicle or a fuel cell electric vehicle, as defined by the Ministry of Road Transport and Highways3.
The EV must be purchased from a GST registered supplier and you must hold a valid tax invoice or debit note for the same4.
The supplier must file the GSTR-1 for the relevant tax period and the ITC must reflect in your GSTR-2B4.
The EV must be used for business purposes only, to the extent of such use. If the EV is used partly for business and partly for personal purposes, you have to reverse the proportionate ITC attributable to the personal use5.
You must file the GSTR-3B for the relevant tax period and claim the ITC in Table 4 (A) (5) of the form4.
Apart from the ITC benefit, you may also be eligible for a clean vehicle tax credit up to $7,500 under the Internal Revenue Code Section 30D, if you buy a new, qualified plug-in EV or fuel cell electric vehicle in 2023 or after. This credit is available for both business and personal use of the EV, subject to certain limitations and phase-out rules.

I hope this helps you understand the ITC and tax benefits on the purchase of an EV for business and personal use.

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Santosh Madanlalji Malu (Certified Public Accountant Chartered Accountant Company Secretary) (123 Points)
Replied 22 July 2024

Do you have copy of "GST Council has recommended a special dispensation for EVs, whereby ITC will be available on the purchase of EVs for all GST registered persons, irrespective of the purpose of use"

Also "Apart from the ITC benefit, you may also be eligible for a clean vehicle tax credit up to $7,500 under the Internal Revenue Code Section 30D, if you buy a new, qualified plug-in EV or fuel cell electric vehicle in 2023 or after. This credit is available for both business and personal use of the EV, subject to certain limitations and phase-out rules." This you are discussing for India or non India provisions? As IRC refer to outside India code. May be USA.