ITC of Cess on Purchase of Vehicle for Factory Use

[PRAVIN TALEGAONKAR]

Dear All,

Recently we have purchase Two vehicle with capacity of 7 seater and Cubic Capacity of Engine more than 1452 CC and supplier levy Compensation Cess on same.

We are manufacturer.

My question is whether we can get ITC of Compensation cess. I know that we can't avail GST ITC since we are not in car transport business.

Regards

Pravin Talegaonkar

AI Summary

Input tax credit restriction on passenger motor vehicles bars credit of compensation cess for manufacturers purchasing such vehicles for factory use.
The statutory blocked-credit rule for passenger motor vehicles prevents claiming input tax credit of GST and the corresponding compensation cess for vehicles used by a manufacturer for factory purposes, except where the vehicle is acquired for further supply, passenger transportation, or driving-training services. Additionally, when compensation-cess credit is lawfully available, it must be utilised exclusively for payment of the compensation cess on supplies.