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CA Sunil (Internal Auditor) 07 May 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..
Madhukar N Hiregange (Chartered Accountant) 07 May 2018
Section 17(5) states that ITC is not available specifically for motor vehicles ( other than for sale further ( lease could be covered here?) , transportation of passenger ( rent a cab, stage carrier, contract carrier etc), imparting training.
Insurance, repair, spares purchase are not specifically barred and therefore available due to reason that if ITC in relation to MV is would be barred- However in 17 (5) it is in respect of which is legally read as only or narrow meaning. ITC available.