Input tax credit on factory-used JCBs is available because the motor vehicle block does not cover in-house goods movement equipment.

GST paid on a JCB used within a factory for movement of goods is eligible for input tax credit because the credit block in section 17(5)(a)(ii) applies only to motor vehicles for transportation of persons. The term "motor vehicle" is read with the Motor Vehicles Act definition, which excludes vehicles of a special type adapted for use only in a factory or enclosed premises. On that basis, a JCB used for in-house transport is not treated as a blocked vehicle, and credit on the purchase, repairs, and spares is available subject to the conditions in sections 17(2) and 17(5)(a)(ii) of the CGST Act.

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Issues: Whether GST paid on the purchase, repairs, and spares of a JCB used within the factory for movement of goods is available as input tax credit.

Analysis: Input tax credit is generally available under section 16(1), subject to the conditions in section 17. Credit is blocked under section 17(5)(a)(ii) only in respect of motor vehicles for transportation of persons, save for specified exceptions. The expression "motor vehicle" in section 2(76) adopts the meaning in section 2(28) of the Motor Vehicles Act, 1988, which covers mechanically propelled vehicles adapted for use upon roads and excludes vehicles of a special type adapted for use only in a factory or enclosed premises. On that basis, a JCB used for in-house transport of goods within the factory is not treated as a blocked motor vehicle for the purpose of the credit restriction.

Conclusion: GST paid on the JCB, including on repairs and spares, is eligible for input tax credit, subject to the conditions in sections 17(5)(a)(ii) and 17(2) of the Central Goods and Services Tax Act, 2017.

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