GST - ITC eligiblity on 2wheeler & 4wheeler for the Registered Person who is also giving part time services of Rapido/Bla Bla car

[KSA Associates]

Dear Experts,

Mr.A is registered person. He is a professional and earns the professional fees. He buys the Bike/Car say for 15 Lakhs and accordingly have ITC on it of Rs 4Lakhs. He also give rides in his car/bike via rapido/Bla Bla car (Car Polling services) while going to & fro to home & office. He is of the opinion that since he is giving the taxable supply of transporting the passenger, he is eligible to avail the credit of mammoth 4 Lakhs as per section 17(5)(a)(B). Whether his opinion is correct or not . Give the detail reasoning for the same

 

AI Summary

Input tax credit for passenger transport: allowed if vehicle used for transportation services; confirm taxable supply and exclusive use.
ITC on motor vehicles seating not more than thirteen persons is generally disallowed under the exclusion in Section 17(5)(a), but an exception permits ITC when those vehicles are used to supply transportation of passengers. Therefore, where a registered person uses a car or bike to provide taxable passenger transport services, ITC may be available; however, entitlement depends on factors such as charging GST on the fares and the degree to which the vehicle is used for the taxable transportation activity.