Car purchase to be eligible for ITC

You cannot claim ITC on the GST paid for the car purchase. Under Section 17(5)(a) of the CGST Act, ITC on passenger motor vehicles is blocked for general businesses like 3D animation services. The GST paid should be capitalized along with the cost of the car to claim depreciation under Income Tax rules.

ITC on passenger vehicles (including cars bought for general business use) is blocked under Section 17(5)(a) of the CGST Act, 2017. This applies to 3D animation businesses as well as most other service businesses.

The exception exists only if the car is used for:
- Providing transportation of persons as a service (like a taxi operator or car rental business)
- Further supply (resale of the vehicle)
- Imparting motor driving training

Since a 3D animation studio does not fall into any of these categories, ITC on the car purchase is not available.

What you can do instead:
- Claim depreciation on the car as a business asset under income tax (reducing your taxable profits)
- The GST paid on the car becomes part of the cost of the asset and is depreciated along with the vehicle price
- For operating expenses on the car (fuel, servicing, repairs), ITC is also blocked on most expenses related to a blocked vehicle

This [GST ITC guide for startups](https://taxgarden.in/blog/gst-itc-startups-saas-cloud-digital-marketing-india-2026) covers the blocked ITC categories and what you can legitimately claim on other business expenses.