Is ITC can avail on car service if car in the name of firm ?
Firm has no buisness related to motor vehicle .
sunny garg (student) (167 Points)
16 February 2018
Miss Mansi Bhojani
(Practicing Chartered Accountant)
(1693 Points)
Replied 16 February 2018
sunny garg
(student)
(167 Points)
Replied 16 February 2018
Miss Mansi Bhojani
(Practicing Chartered Accountant)
(1693 Points)
Replied 16 February 2018
ITC is not available for motor vehicles and conveyances.
For example, XYZ & Co. buys a car for their business. They cannot claim ITC on the same.
Exceptions to ITC on motor vehicles
ITC will be available when the vehicle is used for the following.
a) Supply of other vehicles or conveyances
If you are in the business of supplying cars then ITC will be available.
For example, a car dealer purchases a car for Rs.50 lakh plus 14 lakh GST (ignoring cess calculations). The same car was later sold for 70 lakhs along with Rs.19.60 lakh GST. Since he is a dealer, he can claim ITC of 14 lakhs and pay only Rs.5.60 lakh (19.60 – 14).
b) Transportation of passengers
If you are providing transportation of passengers then ITC will be allowed on the vehicle purchased.
For example, Happy Tours purchased a bus for inter-city transport of passengers. ITC is available.
c) Imparting training on driving, flying, navigating such vehicle or conveyances
A driving school purchases a car to give training to students. The school can claim ITC on the GST paid on the car.
d) Transportation of goods
ITC will be allowed on motor vehicles (and other conveyances) used to transport goods from one place to another. However, this is concerning other transporters and not goods transport agencies (GTA).
Madhukar N Hiregange
(Chartered Accountant)
(39034 Points)
Replied 16 February 2018
The restriction in section 17(5) is only for motor vehicles and other conveyances and NOT FOR THE SERVICES RELATED TO THEM.
There is no restriction on the services in relation to motor vehicles. The services have not been mentioned and cannot be equated to supply of motor vehicles or other conveyance. This is the principle of ejusdem generis. The use for the furtherance of business, however, has to be satisfied.
The Motor vehicles GST credit is available for GTA who is paying GST on full amount of 12%. NO credit to those who are not paying and expecting the customer to pay at 5% on Reverse Charge Mechanism. Also for those reselling ( they have to charge again) + providing transportation services on which GST paid, those imparting driving training, those using the MV for transportation of their goods.
RAJA P M
("Do the Right Thing...!!!")
(127921 Points)
Replied 16 February 2018
Yes... ITC available for Car Service Expenses
sunny garg
(student)
(167 Points)
Replied 19 February 2018
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