When ITC of Motor vehicle is allowed in GST

ITC of a motor vehicle in GST:

Every taxpayer is eligible for ITC taken on inward supplies used for business. Even the supplies intended to be used for business are eligible. Section 17(5) of CGST Act lists the items not eligible for ITC. This section is amended by CGST amendment Act. Amended CGST Act with all changes is relevant here. The motor vehicle is first on the list. Some conditions are there and relaxation is also there. Let us start a discussion on it. ITC of motor vehicle is restricted until the amendment in CGST Act. Now provisions are more clear. You can also watch a video on this topic in the end of this article.

Whether I will get ITC of Trucks used for transportation of Goods?

Yes, an Input tax credit of trucks is freely available. As now restriction is only on passenger vehicles. Even the ITC of JCB, cranes etc will also be allowed.

Can I claim the ITC of Van used for transportation of goods?

No, ITC of passenger vehicles is not allowed unless they have a capacity of more than 13. You may carry goods in it. If it is a vehicle meant for passengers then ITC is not allowed unless any of three condition is fulfilled.

Can I claim ITC of insurance, repair, and maintenance of Trucks?

Yes, there is no restriction on that.  Section 17(5) dont put any restriction on ITC of vehicles meant for transportation of goods.

Can I claim the ITC of passenger vehicle having capacity upto 13 passengers including the driver?

Yes in following cases ITC on passenger vehicle is also allowed.

• supply of same vehicles.
• Transportation of passengers
• Imparting the driving skills.

Can I claim the ITC of demo car?

Yes , ITC of demo car is also allowed. It is used in making supply of cars. In the end demo car is also get sold.