TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>GST on Scrap Motor Vehicle Sales: Input Tax Credit Dispute</h1> <h3>In Re : CMS Info System Limited</h3> In Re : CMS Info System Limited - 2018 (13) G.S.T.L. 486 (A. A. R. - GST), [2018] 2 GSTL (AAR) 73 (AAR) Issues Involved:1. Whether the supply of motor vehicles as scrap after usage can be treated as 'supply' in the course or furtherance of business and whether such transaction would attract GST.2. If the answer to the first question is affirmative, whether Input Tax Credit (ITC) is available on the purchase of motor vehicles (cash carry vans) used for cash management business and supplied post usage as scrap.Issue-wise Detailed Analysis:Issue 1: Supply of Motor Vehicles as ScrapThe applicant sought clarity on whether the supply of motor vehicles as scrap after usage qualifies as 'supply' under GST law and if it attracts GST. The ruling referred to Section 7 of the GST Act, which defines 'supply' as including all forms of supply of goods or services for consideration in the course or furtherance of business. The disposal of cash carry vans as scrap was deemed a sale, and thus a supply under Section 7, as it is a transaction incidental to the applicant's business of cash management. The transaction qualifies as 'supply' because it involves the disposal of business assets for consideration, reflecting income in the business's profit and loss account. Therefore, the supply of motor vehicles as scrap after usage is a supply in the course or furtherance of business and attracts GST. The exact rate of GST and Compensation Cess depends on whether the vehicles are sold as scrap or as old vehicles, which requires further details.Issue 2: Availability of Input Tax Credit (ITC)There was a difference of opinion among the members regarding the availability of ITC on the purchase of motor vehicles used for cash management and later supplied as scrap.View of Member Sh. Borhade:Sh. Borhade opined that ITC should be available. He referred to Section 17(5) of the GST Act, which restricts ITC on motor vehicles except when used for specific purposes, including transportation of goods. He argued that 'goods' in this context should include 'money' as per the Motor Vehicles Act, where 'goods' includes anything carried by a vehicle except living persons. He also referenced the GST E-Way Rules, which treat 'currency' as goods for transport purposes. Thus, he concluded that the motor vehicles used for transporting cash (considered as goods) qualify for ITC under the exception provided in Section 17(5)(a)(ii) of the GST Act.View of Member Sh. Pankaj Kumar:Sh. Pankaj Kumar disagreed, stating that ITC is not available. He emphasized that 'money' is explicitly excluded from the definition of 'goods' under Section 2(52) of the GST Act. He argued that the legislative intent is clear in excluding 'money' from 'goods,' and thus transportation of money does not qualify for the ITC exception under Section 17(5)(a)(ii). He also pointed out that the exclusion of 'currency' from e-way bill requirements supports this interpretation. Therefore, he concluded that ITC on motor vehicles used for transporting money is not available.Conclusion:Question 1: The supply of motor vehicles as scrap after usage is treated as 'supply' in the course or furtherance of business and attracts GST. The exact rate of GST and Compensation Cess depends on further details about the sale.Question 2: There is a split decision. Sh. Borhade opined that ITC is available, while Sh. Pankaj Kumar opined that it is not. Due to the difference in opinion, the matter is referred to the Appellate Authority for Advance Ruling for a final decision.
TaxTMI 
TaxTMI 
