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ITC ON MOTAR VEHICLES

02 February 2019

can we take input tax credit on gst paid for purchase of motar vehicle where our bussiness is not tranportation but we gave it on hire to outsiders.

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Ahmed Ali Areeb (Student CA Final ) (99 Points)
Replied 02 February 2019

Yes, you can avail ITC in your case.

Sec 17(5)(a) talks about blocked credit on motor vehicles in general. But if such motor vehicles are used for making further supply(including giving it on hire) of such motor vehicles, then you are eligible to claim ITC. And as per Sec 7(1)(a), definition of supply includes rental/lease also if made for business purposes.

So, you are eligible to claim ITC on such motor vehicles.

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