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Itc credit on buses used for employees

13 July 2019

Can we avail the "ITC ON THE PURCHASE OF BUS FOR THE TRANSPORTATION OF EMPLOYEES FROM HOME TO OFFICE AND HOME"?
Kindly answer this with refrences of section applicable.
Thanks in advance

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6 Replies

rishi (student) (408 Points)
Replied 13 July 2019

no you won't be able to avail itc as section 17(5) blocks it

Nikhil Bhatia (Article) (309 Points)
Replied 13 July 2019

Although as per section 17(5) block the ITC on Motor vehicles and other conveyances, but there are some exemption which is

when they are used

a) For making further supply of such vehicles or conveyances

b) Transportation of passengers

c) Imparting training on driving, flying, navigating such vehicles or conveyances

d) For transportation of goods.

in your case, it will be use for transportation, hence in my opinion, ITC WOULD BE ALLOWED

rishi (student) (408 Points)
Replied 13 July 2019

itc would be allowed only when the transportation of passenger is taxable supply .however transportation of employees is not a taxable supply hence itc can't be claimed. Nikhil kindly go through the relevant provision and also correct me if I'm wrong

Nandini H Gupta (Chartered Accountant ) (369 Points)
Replied 13 July 2019

Refer CGST amendment Act (to sec 17(5)" motor vehicles for transportation of persons having approved seating capacity of more than thirteen persons((including the driver),"

The credit of the bus transportation is available

Nikhil Bhatia (Article) (309 Points)
Replied 13 July 2019

Hey Rishi,
yes you are right
As per Notification number 12/2017, transportation of passengers are exempted if it used for public transport
but in this case company is using it for employees.