ITC ON MOTOR VEHICLE INSURANCE

[Guest]

Dear Experts,

I have a firm named as 'xyz solutions' (trade name). The firm has GST registration and I am the sole proprietor of this firm (legal name = my name).

I have a car having commercial registration with taxi passing. The vehicle is being used for public transport. Here the vehicle is registered under my name.

And here is my question, 'would i be able to claim the ITC on GST amount on buying/renewal of the motor vehicle insurance policy?'

Awaiting response, Thanks...

[KASTURI SETHI]

Not allowed.

[KASTURI SETHI]

Also go through the lengthy discussion on this issue in October, November, 17 in this forum.

[YAGAY andSUN]

In our view it is available, As per Sec 17(5)(a) - ITC will not be available on PURCHASE OF MOTOR VEHICLE & OTHER CONVEYANCE except when it is for transportation of passengers.

[Ganeshan Kalyani]

In my view ITC is available if transportation of passenger is the nature of business carried out by the querist and the vehicle has been used for that purpose. Here I assume the core business is different hence admissibility of credit is doubtful.

[Guest]

Okay, reply also came an accountant of a Pvt ltd company who shared that they have number of vehicles with private registrations and they do claim the ITC on the invoices of insurance and maintenence expenses of their vehicles.

And he added that if the vehicles are assets of the company then ITC can be claimed. Now here is the catch for me. In the annual return the on my name, xyz Solutions' income, expenses, profits, losses are shown seperately and the income, expense and margins from this taxi vehicle is represented as income from other sources. What can I do now....

[Guest]

ITC Cannot claim for Purchase of Motor vehicle and Insurance on car

JAYAKUMAR.J

AI Summary

Input tax credit on motor vehicle insurance denied except when vehicle is used in the taxpayer's passenger transport business. ITC on motor vehicle insurance is generally disallowed under the GST exclusion for motor vehicles, but an exception applies where the vehicle is used for passenger transport as the taxpayer's business. Contributors differ in view: ITC is available if passenger transport is the nature of the business and the vehicle is used accordingly; where vehicle receipts are treated as other income or passenger transport is incidental, admissibility of credit is doubtful. Companies that treat vehicles as company assets may claim ITC on insurance and maintenance invoices.