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of <h1>Dealers can claim input tax credit on demo vehicles used for customer demonstrations under GST</h1> The Delhi State Tax Department issued a circular adopting the Central Board of Indirect Taxes and Customs clarification on input tax credit availability for demo vehicles. The circular clarifies that authorized dealers can claim input tax credit on demo vehicles used for demonstrating features to potential buyers, as these vehicles facilitate further supply of similar motor vehicles. However, credit is blocked if vehicles are used for purposes other than promoting sales, such as staff transportation. When demo vehicles are capitalized as assets, input tax credit remains available subject to depreciation restrictions under Income Tax Act and disposal provisions requiring tax payment upon subsequent sale.
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