Input tax credit on demo vehicles allowed when used to promote further supply; blocked for unrelated transport or agency use. Demo vehicles used by authorised dealers to provide trial runs and demonstrate features promote sale of similar vehicles and therefore are to be treated as used for making further supply of such motor vehicles; accordingly, input tax credit on their purchase is not blocked under the exclusion for further supply. If demo vehicles are used for unrelated purposes or the dealer merely acts as an agent providing test-drive services on behalf of the manufacturer without supplying the vehicle, ITC is blocked. Capitalisation does not preclude ITC, subject to disallowance where depreciation on the tax component is claimed and to adjustment on subsequent sale.
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Input tax credit on demo vehicles allowed when used to promote further supply; blocked for unrelated transport or agency use.
Demo vehicles used by authorised dealers to provide trial runs and demonstrate features promote sale of similar vehicles and therefore are to be treated as used for making further supply of such motor vehicles; accordingly, input tax credit on their purchase is not blocked under the exclusion for further supply. If demo vehicles are used for unrelated purposes or the dealer merely acts as an agent providing test-drive services on behalf of the manufacturer without supplying the vehicle, ITC is blocked. Capitalisation does not preclude ITC, subject to disallowance where depreciation on the tax component is claimed and to adjustment on subsequent sale.
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