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ITC available or not

Srinivas Ch (Sr.Accountant) (365 Points)

04 October 2018

A partnership firm purchased Car for Managing director for firm activities and works.. can i claim itc?car regd on firm name.

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5 Replies

CA Rakesh Joshi (Chartered Accountant ) (1272 Points)
Replied 04 October 2018

As per Section 17(5) gst paid on purchase of motor vehicle cannot be taken as ITC unless there is further supply of vehicle or vehicle must be used for transportation of goods in the course of business. (i.e furtherance of business should be satisfied)

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Anirudh (Student) (299 Points)
Replied 04 October 2018

Motor vehicles fall under blocked items list. There can be no ITC on car in this case.

Sivakumar (MBA) (23 Points)
Replied 04 October 2018

As per section 17(5) of CGST Act, input tax credit will not be available in respect of motor vehicles and other conveyances, except when

such motor vehicles or other conveyances are supplied further, or
used for transportation of passengers or giving training on driving, flying, navigating such vehicles or conveyances or
are used for transportation of goods.

Hence, if your firm does a business that falls under any of the categories mentioned above, it can claim the input tax credit.

Remember, both input tax credit of GST paid on purchase of such capital goods and depreciation u/s Income Tax Act 1961 will not be allowed together. You can either claim input tax credit of GST, or depreciation u/s Income Tax Act 1961.