TaxTMI 
TaxTMI 
2020 (1) TMI 741
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....d like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a reference is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression `GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions of the applicant is as under:- 2.1 "M/s. Chowgule Industries Private Limited (hereinafter referred to as the Applicant) is a Private Limited Company, is registered under Central Goods and Service Tax Act, 2017 in the State of Maharashtra vide GSTIN 27AACCC927211ZG and also in other State. The Applicant is an authorized dealer for Maruti Suzuki India Limited for supply of motor vehicles and spares and for servicing as also for some other commercial vehicle manufacturers. The Applicant has made purchases of motor vehicles against tax invoice which are reflecting in the books of accounts of the Applicant as capital goods. The vehicles are used as demo cars for providing trial....
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....State of Goa in AAR No GOA/GAAR/07 of 2018-19/4796 dated 26/3/2019 = 2019 (7) TMI 844 - AUTHORITY FOR ADVANCE RULING, GOA, copy of the same in enclosed herewith as Annexure 1. Reliance is placed on Goa authority and the Kerala Authority in Advance Ruling AAR No GOA/GAAR/07 of 2018-19/4796 dated 26/3/2019 = 2019 (7) TMI 844 - AUTHORITY FOR ADVANCE RULING, GOA and No. KER/10/2018 dated 26/09/2018 (AAR - Kerala) = 2018 (10) TMI 514 - AUTHORITY FOR ADVANCE RULINGS, KERALA, where in it held that "Input tax paid by a vehicle dealer on the purchase of motor car used for demonstration purpose of the customer can be availed as input tax credit on capital goods and set off against output tax payable under GST." The Goa authority and the Kerala Authority for Advance Ruling has observed that the suppliers of vehicles supplied demo cars against tax invoices. The demo car is an indispensable tool for promotion of sales by providing trial run to customers and to understand the features of the vehicle. The capital goods which are used in the course or furtherance of business, is entitled for input tax credit. As the impugned purchase of demo car is in furtherance of business, the Applicant i....
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.... always demand for brand new model of cars for test Drive. Hence, it become mandatory for the Applicant to buy new Demo vehicle on launch of new model of vehicle. The Demo vehicles are sold after paying the applicable taxes on sale value at that point of time. 3. Counter of the department filed by Asstt. Commr., Divn II (Swargate), Pune-II CGST Commissionerate, vide letter F.No. CGST/P-II/D-II/R-I/Chowgule/Advance Ruling/19-20/4165 dated 04.10.2019 and received in the office of this authority on 23.10.2019 is as under:- "The assessee has filed an application with Maharashtra Advance Ruling Authority for the point that, whether input tax credit on motor vehicle purchased for demonstration purpose can be availed as credit on capital goods and the same can be set off against output tax payable. In this regard it is to mention that, as per Section 16(1) of the GST Act - "Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him.............." And as per Section 2(19), Cap....
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...., they have applied the similar issue with the Goa Advance Ruling Authority vide AAR No. GOA/GAAR/07 of 2018-19/4796 dated 26.03.2019 = 2019 (7) TMI 844 - AUTHORITY FOR ADVANCE RULING, GOA and it is hold that "The input tax credit on the Motor Vehicle purchased for demonstration purpose can be availd as Input Tax Credit on Capital Goods and set off against output tax payable under GST." 04. HEARING Preliminary hearing in the matter was held on 05.11.2019. Sh. Kishor Bandekar, Advocate, appeared and requested for admission of their application. Jurisdictional Officer, Ms.J. L. Parekar, Supdt., Range -I, Division -2, CGST, Pune-II, also appeared and made submissions. The application was admitted and called for final hearing on 20.11.2019. Sh. Kishor Bandekar, Advocate, appeared and made their submissions. Jurisdictional Officer, Ms. J. L. Parekar, Supdt., Range-1, Division -2,CGST, Pune-II, also appeared. 5. OBSERVATIONS Heard both the parties. 5.1 We have gone through the facts of the case, documents on record and submissions made by both, the applicant as well as the jurisdictional office. 5.2 The Applicant, an authorized dealer for Maruti Suzuki India....
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..... Hence, ITC in respect of capital goods, is available and can be taken, since ITC credit for capital goods is in parity with other goods. However, the credit is available subject to such conditions and restrictions as may be prescribed and in the manner specified in Section 49 of the CGST Act. 5.6 We observe that the Demo Vehicles are capital goods for the applicant and will be capitalized and accounted under Fixed Assets of the Company excluding GST component. They orally submitted that they have /will not claim depreciation on the tax component of the said demo cars nor will claim such expenses incurred as business expenditure u/s. 37 of the Income Tax Act. Further, vide letter dated 13.12.2019, the applicant has submitted that, they are accounting for fixed assets, excluding GST which is accounted as input credit separately. They have also stated that the depreciation is claimed only on the cost of the car and not on GST. 5.7 As per Section 2(19) of the CGST Act, 2017, "capital goods" means goods, the value of which is capitalised in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of b....