TaxTMI 
TaxTMI 
TaxTMI 
Block Credit - Motor Vehicle [section 17(5)(a),(aa),(ab) of CGST Act]
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.... - Input tax credit on purchase of Motor Vehicle :- motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely:- (A) further supply of such motor vehicles; or (B) transportation of passengers; or (C) imparting training on driving such motor vehicles; In Other Words :- ITC Available without any restriction in the following cases in respect of purchase of motor vehicle - If motor vehicle purchase use for transportation of goods - If motor vehicles purchased for transportation for passenger, if approved & seating capacity ( including ....
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....s it is excluded from such blockage in terms of sub-clause (A) of the said clause. Issue :- where the authorized dealer merely acts as an agent or service provider to the vehicle manufacturer for providing marketing service, including providing facility of vehicle test drive to the potential customers of the vehicle on behalf of the manufacturer and is not directly involved in purchase and sale of the vehicles. Clarification :- * In such a case, the authorized dealer is merely providing marketing and/or facilitation services to the vehicle manufacturer and is not making the supply of motor vehicles on his own account. * Therefore, the said demo vehicle cannot be said to be used by the dealer for making further supply of such mot....
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....section 16(3) of CGST Act, which provides that where the registered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the Income-tax Act, 1961, the input tax credit on the said tax component shall not be allowed. * It is further mentioned that in case demo vehicle, which is capitalized, is subsequently sold by the authorized dealer, the authorized dealer shall have to pay an amount or tax as per provisions of section 18(6) of CGST Act read with rule 44(6) of the Central Goods and Service Tax Rules, 2017. clauses (aa) - Vessels and aircraft - If vessels and aircraft purchased and used for transportation ....
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....(a) of the CGST Act 2017. * Motor Vehicles for transportation of Goods:- ITC on repairing, maintenance and insurance of motor vehicles for transportation of goods is admissible with no restrictions. * Motor Vehicles for transportation of persons:- Thus, ITC on repairing, maintenance and insurance of motor vehicles for transportation of persons carrying more than 13 persons will be admissible. However, for motor vehicles for transportation of persons carrying up to 13 persons will be admissible only if it is used for transportation of passengers, further supply of such motor vehicles and imparting training on driving. [Section 17(5)(ab) as substituted vide the CGST (Amendment) Act, 2018] Important Notificat....
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....bjections on availment of ITC by insurance companies in respect of repair invoices issued by the non-network garages on insurance companies. - It is being claimed by the said field formations that in case of reimbursement mode of claim settlement, there is no credit facility offered by the garages to the Insurance Companies and therefore, the supply of repair service is made by the garage to the insured and not to the insurer. - Accordingly, it is being claimed that ITC of repair invoices, in such cases, should not be available to the insurance companies. 3. Various clarification has been issued by CBIC on the availability of ITC in respect of repair expenses incurred in case of reimbursement mode of claim settlement. Examp....