Input tax credit

[Ashwin Bhalakiya]

I have query related to Input tax credit, we intend to hire a Cab for our Marketing manager for area survey (i.e., furtherance of business) and doing contract with Cab provider.

We would like to know whether GST charge by service provider will be eligible for input tax credit.????? Please advise.

[KASTURI SETHI]

Not allowed. ITC is allowed only on those motor vehicles with seating capacity of more than 13 persons (including driver) See the decision of AAR, Maharashtra reported as 2020 (9) TMI 352 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA in the case of Tata Motors Ltd.

[Amit Agrawal]

I agree with Shri Kasturi Sethi Ji.

Kindly also check liability (if any) under RCM under Serial No. 15 of Notification No. 13/2017- Central Tax (Rate) (as amended till date.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Padmanathan KV]

No. The ITC on renting or hiring of motor vehicle (having seating capacity of less than 13 passengers) is not available in terms of section 17(5)(b)(i) of CGST Act, 2017.

AI Summary

Input tax credit eligibility: hiring a motor cab denied where vehicle falls below prescribed seating-capacity, check reverse charge applicability.
Hiring a motor cab for business use does not qualify for input tax credit where the vehicle's seating capacity is below the statutory threshold; such hiring or renting of motor vehicles is excluded from ITC under section 17(5)(b)(i). Verify whether the vehicle meets the seating-capacity threshold that permits credit and whether reverse-charge obligations arise under the relevant GST rate notification.