ITC Eligibility

ITC shall be available if 2 wheelers have been supplied free of cost by a Distributor/Trader to his dealers.
But if the same are supplied by a Manufacturer as a manufactured product, then need to reverse ITC already taken on the raw materials.
[As per CBIC Circular No. 92/11/2019 dated 7/3/2019]

2wheeler will be given by supplier to his dealer at Free of Cost. Dealer's have to achieve their sales target to qualify for 2wheeler. Can supplier claim ITC on 2wheeler purchase invoice.

No Sir. The Supplier is not eligible to claim ITC on Two Wheeler Motor Vehicle as is is being disposed off by way of a GIFT. Goods distributed as Free Samples, Gifts etc is specifically BLOCKED U/s 17(5) clause (h) of the CGST Act 2017.

Moreover, ITC on Motor Vehicles is also BLOCKED U/s 17(5) clause (a) of the CGST Act 2017.

Experts please correct me if there is any different views regarding this matter.

Warm Regards.