Purchase bike

As a General, ITC is not available for motor vehicles

Exceptions to ITC on motor vehicles

 (i) for making the following taxable supplies, namely:—

(A) further supply of such vehicles; or

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; or

For example, Happy Tours purchased a bus for inter-city transport of passengers. ITC is available.

(C) imparting training on driving, flying, navigating such vehicles 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.

(ii) for transportation of goods;

ITC will be allowed on motor vehicles (and other conveyances) used to transport goods from one place to another.