Admisibility of ITC

289 views 8 replies
Section 17(5) of CGST Act specifies that you are not eligible to ITC on conveyance. However exception inter alia includes transportation of goods. That means if you are transporting goods in your vehicle, you are eligible to ITC. Right?
Now my question is if a company owns a cash van.. i. e. it uses the van to carry the cash. would it be eligible for ITC. Since cash is not covered under goods and also this case is not covered under other exception. so whether is it eligible to ITC?
Replies (8)

No, as you mentioned cash is not a good so no ITC.

And what if I am renting the same vehicle to other companies for their cash transfer..
then whether I would be eligible or not??
@ Aashish Bansal

Yes you can take ITC on the Van uses for Cash .

Now As per the definition of Goods U/s 2 (5) : Money is not Included , ...you are Correct in what Sense .... we have to Refer the Definition of Money under Section 2 (75) "Used as consideration for settlement of Obligation" But ....in your case the transfer of money by Van is not Used in to settoff the obligation and used only for transportation of currency to desired destination.
And because what is transported is ‘goods’ and not ‘money’ as the said goods being transported would not serve the same purpose of ‘money’ as in the normal circumstances the money in hands of a person would serve i.e. for the payment of purchases/settlement of dues/discharge of debts etc.;

Hence You can avail the ITC
@ pankaj rawat sir good explanation
sir that was great explanation...
but is it clarified by CBIC or it is interpreted by you?
Dear ,... if your read the Definition of both The Goods & Money , can make a interpretation & which correct .
IF you read defination of Money the word "
"shall not include any currency that is held for its numismatic value;" Means if a person is trading of old/Antique Coins or Money is treated as supply Under GST & Hence cover under the Goods .

So dear provision of law is to be interpreted like this only ... & cbec is not going provide explanation of each issue like this..
thanks sir... I was just asking...I totally agree how you interpreted the definitions...
I was just asking so that while arguing with someone else on same.. I can use that..
but anyway thanks
You are always welcome dear ☺️

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