ITC on Hiring of motor vehicle

[Kumar Kedia]

Sir,

A company is engaged in providing helicopter transportation services to the customer. The company has the contract with travel operator and whenever any employee uses the cab services, the travel operator raises the bill to company on which company deducts TDS. Can he avail credit on hiring of motor vehicle for the transportation of employees. Can it be said that it is providing the same category of service?

AI Summary

Helicopter service company cannot claim input tax credit for hiring vehicles for employee transport under Section 17(5)(a). A company providing helicopter transportation services inquired about availing input tax credit (ITC) for hiring motor vehicles for employee transportation. The responses clarified that under Section 17(5)(a) of the CGST Act, 2017, ITC is not available for motor vehicles used for transporting employees, as employees are not considered passengers. Additionally, rent-a-car services are on the negative list, further disallowing ITC. It was concluded that the company's services do not fall under the same category as the hired motor vehicle services, thus ITC cannot be claimed.