ITC on purchase of transport vehicle

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A proprietor running a steel manufacturing business purchased a commercial vehicle, a Tata Ace, in the business's name in December 2019 to transport goods. The question is whether Input Tax Credit (ITC) can be claimed on the vehicle's purchase and the GST paid on its insurance. The advice provided is that ITC is indeed available for motor vehicles purchased specifically for the transportation of goods, as per Section 17(5) of the GST Act, and this also extends to the GST paid on insurance for such vehicles.

Gopalakrishnan. S

Gopalakrishnan. S (Querist)
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21 January 2020 Sir,

My friend is running a Propreitory business and manufactures steel bench and desk, Bearau, etc. To
transport these goods to his customers' place, he has purchased a Tata Ace, commercial vehicle in Dec 2019
in the name of his Business ( Not in his personal name ).
Now, can he claim ITC on the purchase of the said vehicle and the GST paid on the insurance amount ?

Pls. advice.

CA Anita Bhadra

CA Anita Bhadra (Expert)
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21 January 2020 Yes ,he claim ITC on the purchase of the said vehicle and the GST paid on the insurance amount.

As per Sec 17(5)- ITC is available for motor vehicle purchased for transportation of Goods .GST Amendment Act allows to take ITC on insurance for those vehicles which are not covered under Blocked Credit as per sec 17(5)

Gopalakrishnan. S

Gopalakrishnan. S (Querist)
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23 January 2020 Thanks for your kind reply.

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