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GST Credit for two wheeler

MUSTANSIR F (1 Points)

25 September 2019

Can I avail GST TAX INPUT if I purchase a Two wheeler in the name of my company for my personal use.

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7 Replies

RAJA P M ("Do the Right Thing...!!!") (128101 Points)
Replied 25 September 2019

No... We can't claim ITC for the purchase of Two Wheeler. As its blocked under sec 17(5) of CGST act.

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PRASANT BISOYI (261 Points)
Replied 25 September 2019

You are telling its for personal use, u can avail credit only if u r using it for furtherence of business

Ashay Shah (31 Points)
Replied 25 September 2019

As per the saying of Section 17(5);
If we focus on the word PERSONAL USE here then under 17(5)(g) Any expense which is made for personal purpose shall not be allowed as a credit to you in Business activity
While if we focus on TWO WHEELER word then
as per 17(5)(a) then there will be credit available only on purchase for same further transport of same supply So, in the same manner still u cannot take credit

Hence,we can say that You CANNOT CLAIM THE CREDIT DUE TO BLOCKED CREDIT SECTION

Poonamchand Varma ( Student) (204 Points)
Replied 26 September 2019

Two wheeler and three wheeler are not covered in the definition of motor vehical hence ITC on two wheeler purchase is allowed.
however, ITC is blocked on the basis of use, if the goods are used other than business purpose then ITC is not allowed hence in your case ITC is not allowed. because of personal use

RAJA P M ("Do the Right Thing...!!!") (128101 Points)
Replied 26 September 2019

(Two wheeler and three wheeler are not covered in the definition of motor vehical....)
....???
Is it...?!

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Poonamchand Varma ( Student) (204 Points)
Replied 26 September 2019

The term 'Motor Vehicle' has the same meaning as defined under the Motor Vehicle Act, 1988 "motor vehicle" or "vehicle" means any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding thirty-five cubic centimetres

In other words, motor vehicle include vehicle having more than four wheels but does not include vehicle used in factory or closed premises. 2 wheelers or 3 wheeler are not covered within definition and accordingly if 2 wheelers or 3 wheelers used for the business purpose input tax credit would be available.

Madhusudan Mishra (Faculty of Commerce and Indirect Taxes) (392 Points)
Replied 21 August 2020

Read the definition properly as it is clearly stated that "a vehicle having less than four wheels fitted with engine capacity of not exceeding twenty-five cubic centimeters", so in today's world all the 2/3 wheelers that you have seen are of more than 25CC capacity. Therefore, they are squarely covered in the definition of MV and since they have a sitting capacity of less than 13 persons, credit is totally blocked u/s 17(5).