Input Tax Credit (ITC) on Vehicles under GST Act

Section 17(5) of CGST Act puts limits on ITC for vehicles – understand its implications from the top GST consultant in Udaipur. Our expert chartered accountants in Udaipur examine this provision of GST law.

Generally it is believed that if inputs are received for business, the businessman has the right to share the input tax credit of GST paid on that basis. Section 17(5) of CGST Act 2017 provides information about such supplies in which it is stated that the benefit of input tax credit will not be available on the supplies, even if inputs are used in connection with trade.

Input tax credit on vehicles under GST Act.

Only passenger vehicles with a capacity of more than 13 persons are eligible for availing input tax credit.

Cars and scooters etc. have a capacity of less than 13 persons and therefore do not qualify to avail the benefit of input tax even though it is used for business. Hence, these will not be able to avail the benefit of input tax credit on repair, maintenance, insurance, replacing tyre and tubes etc.

 Here it is interesting to note that the benefit of input tax credit on Goods Vehicles is available because it has not been included in the BLOCK CREDIT. Therefore, input tax credit is available on truck, tractor, tempo etc. and Further more input tax credit is also available on their repair, maintenance, insurance etc.

Can you claim input tax credit on vehicles under GST? Find out here from the leading GST consultant in Udaipur.