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Fixed assets clarification

Senthilkumar (Accounts Manager) (27 Points)

16 April 2018

we are manufacturer of rice bran oil. we have purchased a oil tanker for business purpose. can we consider the oil tanker as vehicles or plant and machinery under fixed asset. please clarify.

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CA Naveen Chand (Chartered Accountant) (12739 Points)
Replied 16 April 2018

U CAN CONSIDER AS VEHICLE

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Senthilkumar (Accounts Manager) (27 Points)
Replied 16 April 2018

Can we take ITC on that vehicle.

CA Naveen Chand (Chartered Accountant) (12739 Points)
Replied 16 April 2018

YES , AS THE VEHICLE IS USED FOR BUSINESS PURPOSE

1 Like

Senthilkumar (Accounts Manager) (27 Points)
Replied 16 April 2018

thanks for your clarification

CMA RAMPRASAD GUNDETI (Dy.MANAGER-FINANCE ) (229 Points)
Replied 16 April 2018

. Motor vehicles & conveyances ITC is not available for motor vehicles and conveyances. For example, XYZ & Co. buys a car for their business. They cannot claim ITC on the same. Exceptions to ITC on motor vehicles ITC will be available when the vehicle is used for the following. a) Supply of other vehicles or conveyances If you are in the business of supplying cars then ITC will be available. For example, a car dealer purchases a car for Rs.50 lakh plus 14 lakh GST (ignoring cess calculations). The same car was later sold for 70 lakhs along with Rs.19.60 lakh GST. Since he is a dealer, he can claim ITC of 14 lakhs and pay only Rs.5.60 lakh (19.60 – 14). b) Transportation of passengers If you are providing transportation of passengers then ITC will be allowed on the vehicle purchased. For example, Happy Tours purchased a bus for inter-city transport of passengers. ITC is available. c) Imparting training on driving, flying, navigating such vehicle or conveyances A driving school purchases a car to give training to students. The school can claim ITC on the GST paid on the car. d) Transportation of goods ITC will be allowed on motor vehicles (and other conveyances) used to transport goods from one place to another. However, this is concerning other transporters and not goods transport agencies (GTA).