Input Tax Credit on Transport Vehicles

[Shyam Naik]

Dear Experts,

We are purchasing Trucks and using the same for providing taxable supply, ie. for mining operation. Accordingly, we take full ITC of the GST paid.

Later, we are also using the same vehicle for exempt service, ie. GTA.

Wherether, there is any requirement to reverse the ITC availed on capital goods, which were originally used for providing taxable service, but later on used for providing exempt service.

Kindly opine citing the statutory provisions.

Thank You.

Wiyh due regards,

Shyam

AI Summary

Input tax credit on capital goods: no reversal if GTA is taxable with ITC; reversal if GTA taxed without ITC.
Input tax credit on trucks treated as capital goods is allowable when used for taxable supplies. If those vehicles are later used to provide goods transport agency services, no reversal of ITC is required where the GTA supply is treated as taxable with ITC available; however, if GTA is taxed under an option that disallows ITC, the statutory mechanism for reversal of ITC on capital goods will apply.