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Input tax credit on vehicles used for business

vinay (Trainee CMA) (241 Points)

05 June 2018

We are engaged in trading of industrial paints. We have purchased a two wheeler which is used by staff to supply industrial paints to customers. Can we take input credit of gst paid on two wheeler. We are doing interstate purchase and selling it intra state for which we are paying/charging IGST and SGST/CGST respectively... Please advice

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7 Replies

Jatin (Accountant) (3479 Points)
Replied 05 June 2018

No, you can't avail ITC

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Vinod Babu (24191 Points)
Replied 05 June 2018

ITC allowed only on motor vehcile as per the definition of motor vehicle act 1988 and no ITC can be claimed on two wheeler.

1 Like

vinay (Trainee CMA) (241 Points)
Replied 05 June 2018

Thanks.... But is it because its a two wheeler?? else what is the impact??

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 05 June 2018

ITC will be available when the vehicle is used for the following.

a) Supply of other vehicles or conveyances
b) Transportation of passengers
c) Imparting training on driving, flying, navigating such vehicle or conveyances
d) Transportation of goods

If you are specifically using it delivering goods , ITC can be claim ,. but it's advisable not take ITC as it's hard convince that it is being used as dilivery of goods (Except bike used in restaurant or online food delivery business)

2 Like

Vinod Babu (24191 Points)
Replied 06 June 2018

👍👍👍

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vinay (Trainee CMA) (241 Points)
Replied 06 June 2018

Okay thanks all!!!!!

CA Padmasri Manyam (CA in Practice) (1340 Points)
Replied 06 June 2018

As per law, if the motor vehicle is used for transportaion of goods, credit can be taken. Therefore, if the amount of ITC on such two wheelers is reasonably good, then i would suggest you to take credit.

In case department raise any objection also, we can argue the matter on merits.