REGARDING AVAILABILITY OF ITC UNDER SECTION 17(5) FOR TRANSPORTATION OF PASSENGER SERVICES

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This discussion clarifies the eligibility for claiming Input Tax Credit (ITC) on motor vehicles used for passenger transportation services under Section 17(5) of the GST Act. Generally, ITC is available for vehicles designed to carry more than 13 passengers, especially when rented to corporates for employee transport and invoiced in the company's name. However, ITC cannot be claimed if the invoice is issued directly in the name of the passenger or for vehicles carrying fewer than 13 passengers for passenger transport.

Suresh S. Tejwani

Suresh S. Tejwani (Querist)
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16 June 2025 ITC can be availed on purchase of motor vehicle if vehicle is given on rent to corporate for transportation of employee and invoice is issued in the name of company?
And what if invoice directly issued in the name of passenger only?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 June 2025 ITC is available for motor vehicles designed to carry more than 13 passengers (including the driver). This category typically includes buses used for public transportation or staff transportation by companies
ITC can't be availed in case of the invoice is in the name of the passenger.

Suresh S. Tejwani

Suresh S. Tejwani (Querist)
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17 June 2025 What about motor vehicles designed to carry less than 13 passengers (including driver) for transportation of passengers and invoice issued in the name of passenger directly?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 June 2025 ITC can't be availed in such a case.

Suresh S. Tejwani

Suresh S. Tejwani (Querist)
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17 June 2025 Why it can't be claimed?
What is the condition for claiming ITC of motor vehicle in transportation of passenger services?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 June 2025 See the link for blocked credit.
https://www.bajajfinserv.in/blocked-credit-under-gst#:~:text=Section%2017(5)%3A%20Lists,health%20insurance%20unless%20legally%20required.

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