GST ruling: Input tax credit denied for motor vehicles used in rent-a-cab services.

The ruling declared that GST paid on the inward supply of motor vehicles for supplying rent-a-cab service is not admissible for credit under section 17(5)(a) of the GST Act. The application seeking input tax credit on the purchase of motor vehicles for rent-a-cab services was deemed inadmissible as the service provided by the Applicant was classified under SAC 9966 as renting of a motor vehicle, not falling under the category eligible for input tax credit.

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Issues:
1. Admissibility of input tax credit on the purchase of motor vehicles for supplying rent-a-cab service.

Analysis:
1. Admissibility of the application:
- The Applicant sought a ruling on the admissibility of input tax credit on the purchase of motor vehicles for supplying cabs on a rental basis.
- The question was deemed admissible under section 97(2)(a) & (d) of the GST Act, and the application was admitted by the Authority.

2. Submission of the Applicant:
- The Applicant argued that as a supplier of rent-a-cab service, she should be eligible to claim input tax credit on the purchase of motor vehicles used for passenger transportation services.
- The Applicant provided photocopies of invoices showing the association of the service with passenger transportation.

3. Submission of the Revenue:
- The Revenue officer highlighted the amendment in the GST Act, allowing input tax credit on the purchase of motor vehicles for rent-a-cab services post-01/02/2019.
- It was argued that the Applicant, being a supplier of rent-a-cab service, should be eligible for input tax credit under the amended provisions.

4. Observations and findings of the Bench:
- The Bench clarified the provisions under section 17(5) of the GST Act regarding input tax credit on motor vehicles used for transportation services.
- The distinction between passenger transportation service (SAC 9964) and renting of motor vehicles (SAC 9966) was analyzed to determine the nature of the Applicant's service.
- It was concluded that the Applicant's service falls under SAC 9966 as renting of a motor vehicle, making the GST paid on the inward supply of motor vehicles not admissible for credit.

Ruling:
- The final ruling stated that GST paid on the inward supply of motor vehicles for supplying rent-a-cab service is not admissible for credit under section 17(5)(a) of the GST Act.
- The ruling was declared valid unless voided under the relevant provisions of the GST Act.

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