VAT ITC credit of Forklift

[Parth Bhatt]

Dear Experts

Pranams. This is Parth Bhat from Ahmedabad.I am Tax Accountant in a automobile ancilliary manufacturing company.My question is whether forklift used in material handling inside plant can be categorised as 'vehicle'? My vat auditor has raised/querry nd disallowed credit. Under Guj VAT definition of Cap Goods is ' plant n machinery used for manufacturing taxable goods accounted as fixed asset nt being second hand goods'. Plant n machienry phrase is nt defined in act neither many judgements of guj highcourt spot light on intrpretation of plant n machinery in connection with forklift/other material handling equipment. Kindly guide me in this regard.

AI Summary

Forklift Classified as Motor Vehicle, Not Capital Goods, Disallowing VAT Input Tax Credit Under Gujarat VAT Rules A tax accountant from an automobile ancillary manufacturing company in Ahmedabad sought advice on whether a forklift used for material handling qualifies as 'plant and machinery' for VAT input tax credit (ITC) purposes. Experts clarified that under Gujarat VAT, forklifts are classified as motor vehicles, not capital goods, thus disallowing ITC. Reference was made to a Gujarat High Court judgment which categorized forklifts and similar equipment as motor vehicles. Consequently, ITC is not permissible, and if claimed, it must be repaid with potential interest and penalties. The discussion concluded with expressions of gratitude for the clarity provided.