GST Credit for two wheeler

ITC / Input 5778 views 7 replies

Can I avail GST TAX INPUT if I purchase a Two wheeler in the name of my company for my personal use.

Replies (7)
No... We can't claim ITC for the purchase of Two Wheeler. As its blocked under sec 17(5) of CGST act.
You are telling its for personal use, u can avail credit only if u r using it for furtherence of business
As per the saying of Section 17(5);
If we focus on the word PERSONAL USE here then under 17(5)(g) Any expense which is made for personal purpose shall not be allowed as a credit to you in Business activity
While if we focus on TWO WHEELER word then
as per 17(5)(a) then there will be credit available only on purchase for same further transport of same supply So, in the same manner still u cannot take credit

Hence,we can say that You CANNOT CLAIM THE CREDIT DUE TO BLOCKED CREDIT SECTION
Two wheeler and three wheeler are not covered in the definition of motor vehical hence ITC on two wheeler purchase is allowed.
however, ITC is blocked on the basis of use, if the goods are used other than business purpose then ITC is not allowed hence in your case ITC is not allowed. because of personal use
(Two wheeler and three wheeler are not covered in the definition of motor vehical....)
....???
Is it...?!
The term 'Motor Vehicle' has the same meaning as defined under the Motor Vehicle Act, 1988 "motor vehicle" or "vehicle"  means  any  mechanically propelled vehicle adapted for use upon roads whether the power of  propulsion is  transmitted thereto from an external or internal source and includes  a chassis  to which  a body  has not been attached and a trailer; but  does not include a vehicle running upon fixed rails or a vehicle of  a special type adapted for use only in a factory or in any other enclosed  premises or  a vehicle  having less  than four  wheels fitted  with  engine  capacity  of  not  exceeding  thirty-five cubic centimetres

In other words, motor vehicle include vehicle having more than four wheels but does not include vehicle used in factory or closed premises. 2 wheelers or 3 wheeler are not covered within definition and accordingly if 2 wheelers or 3 wheelers used for the business purpose input tax credit would be available.

Read the definition properly as it is clearly stated that "a vehicle having less than four wheels fitted with engine capacity of not exceeding twenty-five cubic centimeters", so in today's world all the 2/3 wheelers that you have seen are of more than 25CC capacity. Therefore, they are squarely covered in the definition of MV and since they have a sitting capacity of less than 13 persons, credit is totally blocked u/s 17(5). 

 


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