ITC availability for BOLERO-HILUX (HIGH AT, M1G) HLXX0

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This discussion clarifies Input Tax Credit (ITC) availability for a Bolero-Hilux (HLXX0) used for site work, such as transferring oil barrels and labour. Generally, ITC is restricted for goods and services used in constructing immovable property, with exceptions for plant and machinery. However, if the Bolero-Hilux is used for providing construction services charged at 18% GST, ITC can be claimed. If services are provided at lower GST rates (1% or 5%), ITC must be claimed on a pro-rata basis. Importantly, ITC on Cess paid during purchase and on personal vehicles is not eligible.

PRAVIN CHITRODA

PRAVIN CHITRODA (Querist)
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12 January 2025 Mr. A has purchased bolero-hilux HLXX0 for his site work like transferring oil barrel from one site to other site, transfer labor from one site to other site. Weather ITC available for above in GST for Mr.A ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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12 January 2025 It depends upon output services.
Under Section 17(5) of the CGST Act, ITC is generally not available for goods and services used in the construction of immovable property, except for plant and machinery. This applies even when the construction is for business purposes.

PRAVIN CHITRODA

PRAVIN CHITRODA (Querist)
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13 January 2025 Mr. A is providing construction services then is it available ?
Mr. A also paid CESS while purchasing the bolero it is eligible to take as input ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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13 January 2025 At what rate output services are provided? whether at 18% GST?

PRAVIN CHITRODA

PRAVIN CHITRODA (Querist)
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13 January 2025 YES, output services are provided at 18% GST

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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13 January 2025 In that case you can claim ITC. If you also provide services at 1%/5% GST, in that case claim ITC on pro rata basis.

PRAVIN CHITRODA

PRAVIN CHITRODA (Querist)
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13 January 2025 What about CESS which is paid while purchasing the Bolero