Input tax credit on demo vehicles permitted when used to promote further sale, disallowed for agency or staff transport. ITC on demo vehicles with seating capacity not exceeding thirteen is blocked under clause (a) of section 17(5) except when used for further supply, transportation of passengers, or imparting driving training. Demo vehicles used by authorised dealers to promote and facilitate sale are treated as used for further supply and ITC is available; vehicles used for other purposes or acquired where the dealer acts only as an agent are excluded and ITC is not available. Capitalised demo vehicles qualify as capital goods and attract ITC subject to section 16(3) (no ITC if depreciation claimed on tax component) and adjustments on subsequent sale under section 18(6)/rule 44(6).
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Input tax credit on demo vehicles permitted when used to promote further sale, disallowed for agency or staff transport.
ITC on demo vehicles with seating capacity not exceeding thirteen is blocked under clause (a) of section 17(5) except when used for further supply, transportation of passengers, or imparting driving training. Demo vehicles used by authorised dealers to promote and facilitate sale are treated as used for further supply and ITC is available; vehicles used for other purposes or acquired where the dealer acts only as an agent are excluded and ITC is not available. Capitalised demo vehicles qualify as capital goods and attract ITC subject to section 16(3) (no ITC if depreciation claimed on tax component) and adjustments on subsequent sale under section 18(6)/rule 44(6).
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