GST CHARGED 5% AND CLAIMED ITC

[Deepak D]

Dear Sir/Madam,

One of my client providing the Renting services of Motor vehicles for transport of passengers charged 5% of GST and claimed Input Tax Credit. SCN received on this to either reverse the ITC or to pay differential output Tax any remedy for this pls help

AI Summary

GST at 5% on passenger vehicle rentals disallowed with ITC under Notification 11/2017, Section 16 restriction upheld A service provider engaged in renting motor vehicles for passenger transport has been charging GST at 5% while also availing input tax credit (ITC). The tax authority has issued a show cause notice requiring either reversal of the availed ITC or payment of the differential output tax, as the 5% concessional rate is conditional upon non-availment of ITC. The responding expert affirms that the department's position is legally correct, stating that the applicable notification and statutory provisions clearly prohibit ITC in such cases and that no beneficial judgments or circulars are available to override this restriction.