itc of commercial vechile on delivery of goods

[FARIDUDDIN AHMAD]

tax payer is dealing in retail and wholesale of ready made garment. tax payer purchased commercial vehicle for delivery of goods on firms GSTIN and used it without charging any freight charges separately. expenses of transportation of goods is included in sale price of goods. kindly clarify that tax payer is eligible to claim and utilize the ITC of commercial vehicle or not.

[Amit Agrawal]

With the understanding that you are referring to 'goods transport vehicle', ITC is available against such 'goods transport vehicle' to the taxpayer in given situation.

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

[Rajagopalan Ranganathan]

Sir,

In my opinion, only vehicles for the transportation of persons not exceeding 13 including the driver are excluded from availing iTC of tax paid on such vehicle. In your case, it appears that the vehicle is used for the supply of goods. Hence you are eligible to avail of ITC provided you have capitalized the same in your books of account.

[Ganeshan Kalyani]

ITC is eligible.

[Padmanathan KV]

I agree with experts. ITC is eligible for Goods Transport Vehicle regardless of the fact that you are not charging freight charges separately.

[Shilpi Jain]

Credit eligible. There is no requirement that the vehicle has to be used for providing some services for which separate consideration is charged and GST to be charged on the same to be eligible for the credit.

In the present case, the vehicle being used for taxable business itself is sufficient to take credit.

[Aditya Gondiker]

ITC eligible.

Section 17(5)(a) blocks credit in relation to motor vehicles only where the same are used for "transportation of persons". Therefore, where the end use of such vehicle is for transportation of goods a registered person should be entitled to avail input tax credit.

AI Summary

Input tax credit on goods transport vehicles allowed where vehicle is used for delivery of goods and capitalised in books.
ITC is available for a vehicle whose end use is the transportation of goods; the passenger-transport exclusion does not apply. The vehicle should be capitalised in the books and used in the course of taxable supplies. There is no requirement to invoice freight separately for eligibility to claim the credit.