TaxTMI 
TaxTMI 
2020 (8) TMI 916
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....g GSTN No- (20AAECT4112F1Z2) is a Private Limited Company. The business firm engaged in the business of resale and service of Motor Vehicles of the brand name "BMW" The applicant company has submitted that:- I. The applicant is an authorized dealer of BMW range of vehicles and an authorized service station for the same. The applicant purchases vehicles for demonstration as termed as "Demo Car" against Tax Invoices, which are taken in account as capital assets. The "Demo Car" is used for providing Trial Run/ Demonstration to the customers to understand the features and this is an essential part of marketing and sales promotion to facilitate the sales of cars. II. Sub-section (1) of Section 16 of CGST Act states that "Eve....
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....ability on sale of vehicle, spares, labour can be done by utilising the Input GST on purchase of Demo Vehicle, other expenses like Repairs & Maintenance, Insurance etc., relating to Demo Vehicle used for Demonstration and or Trial run purpose? 3. As per Section 97(2) of the Central Goods and Services Tax Act, 2017(herein after referred to as the 'CGST ACT, 2017) and Jharkhand Goods and Services Tax Act, 2017 empowers the Advance Ruling authority to decide the issue, which are as follows:- (a) classification of any goods or services or both (b) applicability of a notification issued under the provisions of this Act; (c) determination of time and value of supply of goods or services or both; (d) admi....
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....rein the Advance Ruling was allowed in favour of M/s Chowgule Industries Private Limited. In the said order, the Maharashtra Bench for Advance Ruling quoted that "As per the Sales Policy Bulletin : SPB No. 635 dated 15/09/2010 with the Maruti Suzuki India Limited, the Applicant is required to maintain at least one Demo Vehicle of each model per location, Applicant Purchases these Demo Vehicles against Tax Invoice. The said Demo Vehicles are capital goods accounted under Fixed Assets of the Company excluding GST Component. The GST Component of the said Demo Cars is not utilized for claiming depreciation nor claimed as business expenditure under section 37 of the Income Tax Act." 6.3 The applicant also relied on the order passed in the ....
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....es were considered as Capital Goods/ Capital Assets. The demo cars purchased from supplier are being capitalised. The capital goods which are used in the course or furtherance of business, is entitled for input tax credit. Sub-section (19) of Section 2 of the CGST Act states Capital Goods as "the value of which is capitalised in the books of accounts of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business." In this case, demo vehicles is used for furtherance of supply of such vehicles (such as demo car) as the prospective buyer is subjected to training about the features of the car and how to use them and is also used for driving including the test drives. In view ....