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ITC on motor vehicle

26 August 2018

dear all,
one company engaged in manufacturing purchased a small truck for the transportation of company's own finished product to clients places. cn he claim input credit or not as everywhere i could see different views on this. co is not engaged in transportation business.
pls clarify.

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7 Replies

Gauthami (Student CA Final ) (431 Points)
Replied 26 August 2018

since the company is engaged in manufacturing activity and purchased small truck for transportation of its own products it cannot claim ITC. refer block credit sec 17(5).

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Mayank Mandora (CA in Practice) (522 Points)
Replied 26 August 2018

refer section 17(5) which reads as:
input tax credit shall not be available in respect of the following, namely:-

[a] motor vehicles and other conveyances except when they are used--

[i] for making the following taxable supplies, namely:-

[A] further supply of such vehicles or conveyances ; or

[B] transportation of passengers; or

[C] imparting training on driving, flying, navigating such vehicles or conveyances;

[ii] for transportation of goods;

So this section provides that you can claim ITC on Motor Vehicle when used for transportation of Goods.

Therefore you can claim it if motor vehicle is used for transportation of goods no matter whether you are engaged in transportation business or not

Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 26 August 2018

Yes you can claim ITC.

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

Transportation of goods
Transportation of Goods/Passenger
Supply of other vehicles or conveyances

Hence you are using it for tranporting of goods , ITC is available to You

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Gauthami (Student CA Final ) (431 Points)
Replied 26 August 2018

sorry for inconvenience...ITC can be claimed

Shivam RC (Student) (23683 Points)
Replied 26 August 2018

In your case Input Tax Credit ( ITC ) can be claimed, since you are using it for Transportation of Goods.

Hence it is not Blocked u/s 17(5).

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Vinod Babu (24191 Points)
Replied 26 August 2018

Yes, ITC can be claimed.

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shah (student) (32 Points)
Replied 22 January 2019

No you cannot claim ITC since you are not using it for making any taxable supply of transportation of goods. It is for your own goods and hence itc is not to be claimed as per sec 17(5)