INPUT CREDIT FOR MOVABLE ASSETS

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This discussion clarifies the rules around claiming input tax credit (ITC) on cars purchased outright under the CGST Act. Generally, ITC is not allowed for motor vehicles with a seating capacity of up to 13, unless used for specific business purposes like passenger transport or further supply. It's important to check if your car purchase falls under these exceptions.

K.Devan

K.Devan (Querist)
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18 April 2025 DEAR SIRS
WE HAVE PURCHASED CAR OUTRIGHTLY FOR WHICH WE HAVE TAKEN INPUT CREDIT ALONG WITH EXCISE AS SHOWN IN 2A STATEMENT. IS IT CORRECT PLEASE CONFIRM

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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18 April 2025 As per Section 17(5) of the CGST Act, ITC is not allowed on motor vehicles used for personal purposes or for transportation of persons, except in certain cases. ITC is disallowed on cars with seating capacity up to 13 persons (including the driver) unless the vehicle is used for specified business purposes such as transportation of passengers, imparting training, or further supply of such vehicles.

If the car you purchased outright is a passenger vehicle with seating capacity less than or equal to 13, ITC on the GST paid is not allowed..

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 September 2025 Good luck.....

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