itc on purchase commercial vehicle

[baijukumar jha]

Dear Sir

i am sole proprietor of Readymade Garment job work company, i am registered in GST

i want to purchase Commercial Vehicle for Goods supply one company to another company

could i claim ITC on purchase vehicle.

[Rajagopalan Ranganathan]

Sir,

According to Section 17 (5) (a) of CGST Act, 2017 "input tax credit shall not be available in respect of motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver). Since you are purchasing commercial vehicle for goods supply you are eligible to claim ITC of tax paid at the time of purchase of vehicle.

[Spudarjunan S]

Dear Sir,

In terms of section 17(5) - the restriction is only for motor vehicles for transportation of passengers (here it is based on the design from the manufacturer not solely based on the use). For instance you can't take ITC on purchase of Swift D'zire even if you use the same for transportation of goods, as the vehicle is designed for transportation of passenger.

Hence, if the vehicle is for transportation of goods, there is no restriction under GST to avail the credit unless it is used for exempt supplies.

 

[KASTURI SETHI]

ITC is allowed.

[Ganeshan Kalyani]

ITC is allowed on vehicle used for other than tranporting of passenger.

AI Summary

Sole proprietor can claim Input Tax Credit on commercial vehicle for goods transport under Section 17(5) of CGST Act. A sole proprietor of a garment job work company inquired about claiming Input Tax Credit (ITC) on the purchase of a commercial vehicle for transporting goods. Respondents clarified that under Section 17(5) of the CGST Act, 2017, ITC is not available for motor vehicles designed for passenger transport with a seating capacity of up to thirteen persons. However, since the vehicle is intended for goods transportation, ITC can be claimed, provided it is not used for exempt supplies. The consensus among the replies was that ITC is allowed for vehicles used for transporting goods.