Itc for recipient

ITC / Input 158 views 2 replies

suresh

accountant

66 Points Joined September 2010

Dear Experts..

We are doing Travel business ( Car , Van and Buses).. One of my client asks If we collect 12% on Car they can't take ITC But Buses they can claim ITC and they given below details to me..

As per Section 17(5) of the CGST Act, ITC for “rent a cab” is not allowed, except when the customers are required to provide cab facility to their employees under any statute.

The term “cab” is not defined in GST Act. By borrowing the definitions from MV act, it would cover motor cab (upt 6 passengers) and maxi cab (upto 12 passengers). So GST paid on any other vehicles (like buses, vans with more than 12 passenger capacity) would be entitled for credit for the customers of TRANSPORT SERVICE PROVIDER(TRAVELS) .

Pls reply on this and thanks in advance

Replies (2)

CA Sunil Kumar

Chartered Accountant

4524 Points Joined July 2014

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.
Definition of motor vehicles is not required to claim ITC under GST.

Pankaj Rawat

GST Practitioner

55062 Points Joined June 2017

Your client has mix the 2 concept in one .

Tax Services provided by the e-operator like Ola Cab, Uber cab has to deposit GST on RCM ,..the drivers shall not be required to register under GST

As per section 17(5) , the Recepient is not allowed take ITC on " rent cab "

So you do not fall under above 2 condition, you can claim ITC .