GST on Motor car purchased

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This query is : Resolved

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This discussion clarifies whether a proprietary transport business can claim input GST on a motor car purchased for Rs. 3,600,000. Generally, input tax credit (ITC) for cars is blocked under Section 17(5) unless the vehicle is used for resale, passenger transport (like a taxi), or a driving school. If the car is used in furtherance of the business beyond these specific purposes, ITC may be claimable; otherwise, it will be reversed.

PRAKASH MENON

PRAKASH MENON (Querist)
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17 February 2024 Dear Sir,
Please note that, we have purchased a Motor car worth Rs.3600000/- on June 2023. We are a proprietary concern, doing transport business.
Please let me know whether we can avail input GST while paying our output tax.

Please reply back immediately.
Prakash Menon

RAJA P M

RAJA P M (Expert)
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17 February 2024 No, ITC can't be claim for the purchase of this car. In case the will be used in furtherance of business then You can avail. Otherwise it will be reversible...

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)
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19 February 2024 Section 17(5) blocks the inputs tax credit on car unless it falls under any of the 3 permitted uses such as for further sale (car showroom), passenger transport (taxi service) and motor driving school.

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