A transport service provider (partnership firm) operates AC buses for passenger transport, booked partly through an online travel aggregator (which pays GST under Sec 9(5) on the aggregator-routed bookings) and partly through direct local agent/branch collections.

Facts:

  • 2 AC buses purchased Sept 2024; ITC availed on purchase.
  • Actual operations/sales started only from April 2025.
  • Fare charged to passengers throughout has been fare + 5% GST only — no separate GST invoice issued to B2C customers; tickets are the only document, showing the 5% component.
  • Despite this, for return/payment purposes, the firm has been grossing up monthly local-agent collections (treating the collected amount as 118%/112% depending on period) and self-computing/paying 18% output tax (12% before 22 Sept 2025) using accumulated ITC, from April 2025 to date.
  • ITC has also been claimed on repairs, consumables, and commission paid to the aggregator, all tied to this bus operation.
  • This month, both buses were sold to an LLP. Can the ITC available in ledger be used to set off GST payable on sale of buses?