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Input credit

Sujit Kumar Sahoo (audit assistance) (56 Points)

05 January 2019

Dear Sir,

We are Private Limited Company manufacturing Stainless Steel Pipes of different shapes and sizes. We purchased a new Motor Car in the name of our company. We have taken input credit for the month of Oct 2018.Sir My question is can we take that input or not?

If not how we will treat that input in our GST Return whether payment the tax liability or reverse the same input in that month ?

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7 Replies

Sundararajan S (Final Student of ICAI) (1764 Points)
Replied 05 January 2019

As per section 17(5) it is blocked credit. You have to reverse it if not done earlier and it remains in credit ledger. If utilised, then reverse in this month 3B. Automatically while creating Challan you have to pay through cash. But before paying in cash, check out whether any credit missed which is present in GSTR 2A so that you can use that credit to reverse this.

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suraj goundwadkar (95 Points)
Replied 05 January 2019

is that motar car purchased for business only?

Sujit Kumar Sahoo (audit assistance) (56 Points)
Replied 05 January 2019

No,Our MD is driving that car for his personal use.

pritesh (CA Final student) (7101 Points)
Replied 05 January 2019

For personal use you cannot avail itc..

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 06 January 2019

Yes its block u/s 17(5)

As the supplier has issued you the Tax Invoice (car) & Same will be going to reflect in your GSTR 2a . hence , in your book of account you will pass the Entry for ITC first , then have pass the 2nd entry for Its reversal . for Eg.

1st Entry
Car A/C Dr
ITC A/c Dr
To Supplier Cr.

2nd Entry
ITC Reversal (U/s 17(5)). A/C ..Dr
To ITC A/c ............. Cr

In Gstr 3b show it under Reversal column only :
Show the under table 4 , Row D(1)

Note : Do not show the ITC on car purchase under Table 4 , Row 1(5) all other ITC because the fiqure reported in Row d(1) as a reversal is not going to be deducted from the same .