Input tax credit

[DK AGGARWAL]

Dear Sir

GST-Input Tax Credit

1---Please clarify if the ITC is available on replacement or repair of Tube lights, electric wire, in the office. In the purchase invoice of supplier GST number is appearing of buyer and in GSTR- 2A the ITC is shown.

2---Similarly, in repair of godown, expenses are incurred for replacement of roof sheet etc and the ITC is appearing in GSTR- 2A. Please note its not a new construction .

3----Similarly, is ITC available on replacement of CAR tyres, battery or service bill. ITC is available in GSTR- 2A as we have given our GST number to the supplier ?

Kindly respond asap

[Brijesh Verma]

ITC available for 1 & 2 but not for 3

[DK AGGARWAL]

Dear Sir

Is there is any specific reason of not allowing credit in case of clarification --3 as its a CAR used for business purpose and not a NEW purchase of CAR.

"3----Similarly, is ITC available on replacement of CAR tyres, battery or service bill. ITC is available in GSTR- 2A as we have given our GST number to the supplier "

Kindly respond in detail and quote some section etc.

[Brijesh Verma]

Dear Sir

Section 17(5) disallows credit in respect of motor vehicles. Further, the recent clarification (proposed amendment) speaks about such disallowance in respect of servicing, repair, etc as well.

[DK AGGARWAL]

OK

Thanks Sir

[Ganeshan Kalyani]

Input tax credit is allowed on query 1 & 2. Third one is covered under ineligible list.

[Pavan Mahulkar]

It may not be available for 2 also...

Please read section 17

(c) works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for  further supply of works contract service;

(d) goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business.

Explanation.––For the purposes of clauses (c) and (d), the expression “construction” includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property;

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Shri Madhun.

[Brijesh Verma]

They havent capitalised it. It appears specifically from the query that the expense at 2. Is of revenue nature

[Ganeshan Kalyani]

Such expenses are treated as renevue expenditure. They are not capitalized. Hence credit is allowed.

[Pavan Mahulkar]

ITC may not be available in case 3 also,

Section 17(5)

(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely:-

(a) motor vehicles and other conveyances except when they are used––

(i) for making the following taxable supplies, namely:-

(A) further supply of such vehicles or conveyances ; or

(B) transportation of passengers; or

(C) imparting training on driving, flying, navigating such vehicles or conveyances;

(ii) for transportation of goods;

So it is clearly mentioned in the section that "ITC shall not be available in respect of" which indicates that neither on the purchases of the same nor on the parts there of

[Nash Industries I Pvt Ltd]

1--- ITC on replacement or repair of Tube lights, electric wire, in the office.- Allowed

2--- ITC on repair of godown, expenses are incurred for replacement of roof sheet etc Not allowed (negative list)

3---- ITC on replacement of CAR tyres, battery or service bill.- Not allowed (Negative list)

Regards

S.Ramaswamy

[Ganeshan Kalyani]

Credit is allowed in all the three query. I correct my previous reply on query no.3.

Credit is not allowed on new motor vehicle. The expense related to motor vehicle is not mentioned in the negative list under section 17(5). Hence the credit is allowed.

AI Summary

Input tax credit availability: allowed for office repairs and godown maintenance, but restricted for motor vehicle servicing under section 17(5).
Availability of Input Tax Credit on maintenance and repairs depends on expense characterisation: routine office repairs (tube lights, wiring) treated as revenue expenditure permit credit when supplier invoices show the purchaser's GSTIN; repairs to a godown may be excluded if capitalised as construction/renovation; and credit on motor vehicle parts and servicing is generally disallowed by the statutory motor vehicle exclusion unless the vehicle is used for specified excepted supplies.