Car Rental

[Chandani Gadhia]

Hi,

Have a Querry with regard to Input tax credit under Rent a Cab service

We are a travel agent providing Rent a Cab service also. We hire Car from Cab provider and further provide this service to client. Supplier charge us 12% GST and we charge 5% GST to client. Whether we can ITC of 12% GST Charged by supplier?

[KASTURI SETHI]

In my view ITC is allowed.

[KASTURI SETHI]

Though this case law pertains to pre-GST era yet it is relevant.

2019 (5) TMI 712 - CESTAT BANGALORE M/S. GODAVARI BIOREFINERIES LTD. VERSUS COMMISSIONER OF CENTRAL TAX AND CENTRAL EXCISE, BELGAUM

AI Summary

Input tax credit allowed where rent-a-cab operator pays higher GST to supplier than charged to client. Whether a travel agent hiring cars from a cab provider and paying a higher GST rate can claim Input tax credit when the agent charges a lower GST rate to clients; the advisory response affirms that ITC is permitted and cites a pre GST tribunal decision as relevant authority supporting allowance of the credit.