ITC CLAIMED ON BIKE

[baijukumar jha]

DEAR SIR

I AM PROPRIETOR OF READYMADE GARMENT CO.

I HAVE PURCHASE A BIKE FOR COMPANY PURPOSE .

CAN I CLAMED ITC ?

[KASTURI SETHI]

Not allowed Hit by Section 17(5) of CGST Act.

[Ganeshan Kalyani]

Bike cannot be said to be used for transportation of goods. Milkman uses bike to carry milk to do door to door delivery. Hotel uses bike to make food delivery at buyer's house. Can we say that credit is eligible because sec 17(5) does not restricts credit on motor vehicle used for transportation of goods. We cannot take credit because as per motor vehicle act bike is for transportation of passenger . And motor used for transportation of passenger upto seating capacity of 13 person including driver is incudes in sec 17(5). Hence in your case credit is not eligible.

[Jay Prakash]

I purchased a bike on the name of my organization, and the tax invoice uploaded by my bike agency is being shown on my GSTR-2A. Can I still not claim the ITC?

[KASTURI SETHI]

Dear Jay Prakash Ji,

According to Section 2(76) of CGST ACT :- “motor vehicle” shall have the same meaning as assigned to it in Clause (28) of Section 2 of the Motor Vehicles Act, 1988 which is as follows:-

“motor vehicle” or “vehicle” means any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding twenty-five cubic centimeters.

Thus Motor Cycle (Bike) is not a motor vehicle under CGST Act also. Hence you are not eligible for ITC.

AI Summary

Garment Company Denied ITC on Bike Purchase for Business Use Due to CGST Act Section 17(5) Restrictions A proprietor of a garment company inquired about claiming Input Tax Credit (ITC) on a bike purchased for company use under the Goods and Services Tax (GST) framework. Respondents clarified that ITC is not permissible due to Section 17(5) of the Central Goods and Services Tax (CGST) Act, which restricts credit for motor vehicles used for passenger transportation. Despite the bike being listed on GSTR-2A, it does not qualify as a motor vehicle eligible for ITC under the CGST Act, as bikes are considered passenger vehicles and not for goods transportation.