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Input tax credit on vehicle insurance premium paid

RAHUL VATS (Professional) (26 Points)

28 June 2017

Hi, Please suggest the proper treatment of Input Tax Credit on payment of Vehicle insurance in following 2 cases: a) If vehicle is running on hiring/leasing b) If vehicle is used in business by company officials like, directors/cfo/ceo. Please suggest for above situations.

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4 Replies

CA. Kuna Mohanty (Sr. Manager (Finance) MMTC Limited ) (55 Points)
Replied 23 August 2017

In the situation 1 . eligible for ITC and incase of sit.2 not eligible subject section 17(5) of CGST Act.

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CA Himali Gajjar (student) (340 Points)
Replied 05 January 2018

Sir, can you kindly specify in which clause of section 17(5) it is written that ITC of Insurance premium paid on car insurance will be blocked??

Rishi M (Student) (40 Points)
Replied 14 January 2018

ITC in case 1 is fully allowed. However in case 2, if vehicle is used partially for business purpose & partially for personal purpose then ITC reversal is required on prorata basis for services utilized to the extent of personal purposes as per section 17 (1) of CGST Act.

jayanth reddy gade (2 Points)
Replied 29 June 2018

Dear Rishi,

In the above case 2 when Vehicles are used for the Purpose of transporting employees I think Section 17(1) is not Applicable for Ineligibility. If there is any section for disallowing the Input credit for above case Kindly give me a reply