Input Tax available

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This discussion clarifies whether a spinning mill can claim Input Tax Credit (ITC) on the purchase of a JCB and Tipper lorry for business use. Generally, ITC is claimable if these vehicles are used in the course or furtherance of business and depreciation is not claimed on the tax component of their cost under the Income Tax Act. If depreciation is claimed on the tax component, ITC will not be allowed, and the cost should be capitalised.

Prakasam Sankaran

Prakasam Sankaran (Querist)

10 August 2022 Can we claim ITC if JCB and Tipper lorry Purchase for business purposes. Our Nature of business is Spinning mill

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

10 August 2022 Do you need JCB for your business routine?
If yes, you can claim ITC, otherwise you can capitalize it and claim depreciation over total cost.

Adv. Ravish Bhatt, ADIT, CIOT

Adv. Ravish Bhatt, ADIT, CIOT (Expert)

17 August 2022 In terms of s.16(1) of CGST Act, 2017, a registered dealer is entitled to credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business.

s.16(3) provides that if a registered person claims depreciation on tax component of cost of capital goods under the provisions of Income Tax Act, 1961, ITC shall not be allowed.

So, if you are utilizing JCB for furthering your business and you are not claiming depreciation on tax component of cost of JCB, you can claim ITC.

Author: Advocate Ravish Bhatt
Gmail: ravishdbhatt@gmail.com
Link to Linkedln Profile: https://bit.ly/3IDGfsU

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