One of our client ( Partner ship firm) is doing the business of catering services, preparation of food in home and providing the services to colleges and schools within the city, they are planning to buy one NEW TATA ace vehicle, for carrying the food between preparation place to schools and colleges, whether they are eligible to take ITC paid on new vehicle, the vehicle is using exclusively the purpose of goods carrying only, for inputs carrying and outward supplies carrying only.
02 February 2018
As per Section 17(5)(a)(ii), your client is eligible to take ITC of the GST paid on the Tata Ace vehicle. As per Section 17(5)(a)(ii), Input Tax Credit shall be available in respect of motor vehicles and other conveyances when they are used for transportation of goods.
In your client case, they are going to use the vehicle exclusively for transportation of goods and hence, they are eligible for taking ITC
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