ITC on second havd vehicle purchase

[KALLESHAMURTHY MURTHY K.N.]

Dear Sirs,

A scrap dealer has purchased a second-hand vehicle, rebuilt and hired. It is used to supply food articles, vegetables, milk and other daily consumables. Is he eligible for ITC on the purchase of the second-hand vehicle or blocked u/s 17?

AI Summary

Debate on Scrap Dealer's Eligibility for Input Tax Credit Under GST: Section 17(5) Classification Key Issue A scrap dealer purchased a second-hand vehicle, refurbished it, and used it for transporting daily consumables. The discussion centers on whether the dealer is eligible for Input Tax Credit (ITC) under GST. The main contention is whether the vehicle is considered scrap or a second-hand motor vehicle, as ITC is blocked under Section 17(5) for certain motor vehicles. If the vehicle is classified as scrap, ITC may be claimed if used in business. However, if it is a motor vehicle, ITC eligibility depends on its use and classification. The debate highlights the importance of accurate classification and documentation.