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Itc on bicycles used within the factory

ARS BHARATHI (Executive in gst department) (274 Points)

21 February 2020

Need a clarification:

We procured some bicycles for movement inside the plant to move from one building to another building.

Whether ITC is allowed on such purchases of bicycles?

Please give your views

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9 Replies

RAJA P M ("Do the Right Thing...!!!") (127162 Points)
Replied 21 February 2020

As per my view.,

Yes... You can claim ITC for the purchase of bicycle which is used in Your business activities if it's not blocked u/s 17(5) of CGST act...

Wait to others view...

ARS BHARATHI (Executive in gst department) (274 Points)
Replied 21 February 2020

With reference to the above, there is some school of thought is that the credit is inadmissible in terms of section 17(5) (g) "goods or services or both used for personal consumption". I feel though it is used by workers to move within the plant, it is eligible as the same are used within the principle place of business and not the other way, i,e, not used at home or outside. Hence i feel it is admissible under capital goods category. Other opinions are welcome.

RAJA P M ("Do the Right Thing...!!!") (127162 Points)
Replied 21 February 2020

Yes... I agreed to above. Also ITC is available...
You can take ITC for the purchase of Bicycle...

sabyasachi mukherjee (26057 Points)
Replied 21 February 2020

YES INPUT TAX CREDIT AVAILABLE...

Anshuman Basu (account -GST) (1549 Points)
Replied 21 February 2020

Dear all expert I want to now if they purchase motorcycle instead of bycicle then what is the tax treatment?

ARS BHARATHI (Executive in gst department) (274 Points)
Replied 21 February 2020

Not eligible 17(5)

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 21 February 2020

Dear ARS

Yes if the cycle is used in business , offcourse can avail ITC on same .
Cycle is not covered under Section 17(5) , because it's clearly prescribed therein the said section that credit is block on Motor vehicle & Bicycle do not fall under definition of Motor vehicle ( refer 2(78) of CGST Act))

Dear Anshuman
If Motor cycle is purchase then ITC is not available.
As already refer above section 17(5)(a) Motor vehicle transportation of passenger less than 13 person, if not used for purposes : further supply of m. vehicle, transportation of passenger, imparting of Training, the Credit is not available.