Input gst for jcb

This query is : Resolved

Quick Summary

ITC on JCB purchase depends on its classification and usage. Since JCB is treated as construction machinery (not a motor vehicle), ITC is generally allowed if used for business purposes. Section 17(5) restrictions apply only to motor vehicles, not such machinery.

Querist : Anonymous

Querist : Anonymous (Querist)

05 June 2018 ITC is not available under GST for Motor vehicles & conveyances.
My Question is can we claim gst on Purchase of New JCB for Construction Company???

CA Himanshu Ojha

CA Himanshu Ojha (Expert)
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05 June 2018 The provision of Sec. 17(5) (a) of the CGST Act, 2017 restricts credit on motor vehicle for specified purposes listed therein. Further, in terms of the provision of Section 2(76) of the CGST Act, 2017 the expression ‘motor vehicle’ shall have the same meaning as assigned to it in Clause (28) of Section 2 of the Motor Vehicle Act, 1988, which does not include the mining equipment, viz., tippers, dumpers.

Thus, as per present provisions, the GST charged on purchase of earth moving machinery including tippers, dumpers used for transportation of goods by a mining company will be allowed as input credit.

Querist : Anonymous

Querist : Anonymous (Querist)

05 June 2018 BUT JCB is not registered as a heavy motor vehicle but its registered as an 'excavator and loader machine' with the RTO. so i think JCB falls in the category of a particular type of machinery and not the motor vehicle.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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01 August 2024 Under the GST regime in India, the eligibility for claiming Input Tax Credit (ITC) on the purchase of machinery such as a JCB (excavator and loader machine) depends on how the machine is classified and the purpose for which it is used.

### ITC on JCB for Construction Company

#### Classification of JCB
- **JCB as Machinery:** If the JCB is classified as machinery and not as a motor vehicle, then it is not subject to the blocked credit provisions applicable to motor vehicles under Section 17(5) of the CGST Act, 2017.
- **Registration as Excavator and Loader:** Since the JCB is registered as an 'excavator and loader machine' with the RTO and not as a motor vehicle, it can be considered a type of machinery.

#### Purpose of Use
- **For Business Purposes:** If the JCB is used for business purposes, such as for construction activities, the ITC on the purchase of the JCB should be available.

### Relevant GST Provisions

**Section 17(5) of the CGST Act, 2017:**
- **Blocked Credits for Motor Vehicles:** ITC is not available for motor vehicles and conveyances except when they are used for specific purposes like transportation of goods, imparting training on driving, flying, navigating such vehicles or conveyances, etc.
- **Machinery:** The blocked credit provisions do not apply to machinery used in the course or furtherance of business.

### Practical Implications

- **Eligibility:** Since the JCB is classified as machinery (excavator and loader) and is used for business purposes by a construction company, you should be eligible to claim ITC on the GST paid for its purchase.
- **Documentation:** Ensure proper documentation, including the purchase invoice, registration details, and proof of business use, to substantiate your ITC claim.

### Conclusion

You should be able to claim ITC on the purchase of a new JCB for your construction company, provided it is classified as machinery and used for business purposes. The blocked credit provisions under Section 17(5) of the CGST Act do not apply to machinery used in the course or furtherance of business. Always maintain proper documentation to support your ITC claim. For precise application and compliance, consulting with a GST professional or tax advisor is recommended.

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