Itc on used car

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This query is : Resolved

Jayaprakash Purushothaman (Querist)

03 May 2019 Requesting clarification on following query,

Whether the second hand dealer can claim ITC on used car provided the dealer pays GST on entire sale value at full tax rate.

If yes, requesting you to share the related notifications.

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)

04 May 2019 ITC not available on Vehicles purchase other than Section 17(5) of CGST Act, 2017, it clearly stipulates that ITC of motor vehicle is available for ‘namely’ services, as per your query the motor vehicle as mentioned by you is not commercially registered under Motor Vehicle Act, therefore, it cannot be used for any commercial purpose such as transportation of passengers or goods.

Jayaprakash Purushothaman

Jayaprakash Purushothaman (Querist)

04 May 2019 Thank you for your quick response.

In my case, the dealer is a leasing company and will be leasing the car to my company and I will be owning the car as an employee. The monthly rental is also charged at full GST and cess. Under this circumstances, I believe the dealer (being a car leasing company can take ITC for used cars provided GST is paid on entire sale value and full rate.