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Itc on car expenses

N CHIDAMBARAM (PROPRIETOR) (23 Points)

24 December 2018  

Whether ITC can be claimed on repair and service charges and insurance of car used for professional purposes


 3 Replies

Aman Kumar (Accounts Executive) (734 Points)
Replied 24 December 2018

Clause (a) to section 17 (5 ) , declares motor vehicles and  other conveyances  as blocked credit,  subject to certain exceptions. Accordingly no ITC is available in respect of motor vehicles If you are into the business of renting / leasing car/ Conveyence / Training ----> Yes can claim ITC input credit on both car and Insurance premium. However if you are in some other business, where the car is used for furtherance of business ----> you cannot claim ITC on Car only, but ITC on insurance & other accessories is not blocked. Therefore there is no restriction on ITC towrds Insurance paid .so you can claim ITC on insurance premium..

 

Ravi Kumar Somani (Indirect Taxes Specialization)   (3893 Points)
Replied 24 December 2018

No restriction as of now. However this is restriction is brought out in the new amendments in the GST which is yet to be made effective. Recently, finance minister has informed that they would be making the amendments effective from Feb 2019.

pritesh (CA Final student) (7071 Points)
Replied 24 December 2018

yes you can claim not blocked under sec17(5)

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