Under some circumstances, ITC on motor vehicles is applicable on GST payments. Everything about ITC on vehicles is covered in this blog. Under the GST registration, there is an ITC on motor vehicles. If such motor vehicles are used to make the following taxable supplies, the ITC on motor vehicles is accessible under GST. Keep reading this post to learn more.
Some ITC For Automobiles restrictions
- Motor vehicles that are used or proposed to be used for the transportation of products are eligible for an input tax credit (ITC).
- In addition, ITC will be permitted for passenger transport vehicles. These have a seating capacity of at least 13 people (including drivers). Furthermore, there are no such limitations on ITC in this regard.
ITC on a motor vehicle is not available in the following situations:
- It is not available for transportation of people with a seating capacity of fewer than 13 people, including the driver.
- It is also not applicable to services such as general insurance, servicing, repair, and maintenance. They are on motor vehicles that are used to carry people with a seating capacity of fewer than 13 people, including the driver’s seat.
ITC Exemptions for Motor Vehicle Conditions
The following are exceptions to the rule that ITC is accessible on a motor vehicle even if the seating capacity is fewer than thirteen:
- Further supply of such motor vehicles: If the registered person is in the business of providing additional motor vehicle supply. Furthermore, even if the vehicle’s seating capacity is fewer than 13, he can claim ITC on it.
Examples
- I’m a lawyer who travels to my client’s location to provide consulting services. I purchase a car for commuting from my workplace to the client’s location for this purpose. Is it possible to claim ITC for goods and services tax paid on a car purchase?
As it is covered by the blocked credit under clause (a) of section 17(5) of the CGST Act, 2017, no ITC would be payable.
2. Is an employer eligible for ITC for automobiles purchased for the purpose of transporting personnel to the factory?
Section 17(5) of the Internal Revenue Code exempts ITC exclusively for passenger transportation. In the case of employees, the same exemption does not apply. As a result, if an employer uses a vehicle with a seating capacity of more than 13 people.
3. Furthermore, he will be eligible for unrestricted ITC for such a car. However, if he uses a vehicle with a maximum seating capacity of 13 employees (including the driver), ITC will place a hold on the car.
I’m a dairy and milk product distributor. I recently purchased a truck to transport dairy and milk products from my facility to a dealer’s location.
Is ITC applicable for the purchase of a truck and related services?
Yes, ITC will be available for vehicles that use to deliver products.
Traveling is subject to GST, which calculates the mode of transportation utilized by the individual.
Travel is always on our minds, but due to the current scenario in the pandemic coronavirus, our options are fewer. However, if given the chance to travel safely, we will gladly take it. Railways, airplanes, seaways, and roadways are the most common types of transportation in India. All four means of transportation are subject to the Goods and services tax.
The following is the detailed bifurcation:
NOTE: – If you’re going for business, you can claim Input Tax Credit on the goods and services tax on plane tickets. – Airlines can claim Input Tax Credit on services in the case of economy class air tickets. – Airlines can claim an Input Tax Credit on food, replacement parts, and other inputs other than gasoline in the case of business class plane tickets.
– The majority of service providers in a given industry offer a similar set of services. A majority of airlines, for example, provide a package that includes onboard catering and air transportation.
Final Thoughts
If the nature of the services is such that one is the primary service and the others are secondary. It is a combination of services that are incidental or supplemental in nature. These services aid in the betterment of primary service. A hotel’s stay service, for example, is frequently a combination service. Furthermore, 3-4 items of clothing launder free each day. The supply of such a service is an add-on to the provision of hotel accommodations.
