ITC on Car Purchage

Purchased on Firm Name. Shall We Claim ITC
Replies (5)
Quick Summary
This discussion clarifies the rules around claiming Input Tax Credit (ITC) on car purchases under GST. Generally, ITC on motor vehicles is restricted, especially for passenger transport with a seating capacity of 13 or fewer. However, exceptions exist if the vehicle is used for further supply, passenger transportation services, or driving training.

Only if your firm provides rent a cab service
The ITC on motor vehicle under GST is available if such motor vehicles use for making the following taxable supplies. However, there are certain conditions:

• Input Tax Credit (ITC) is admissible for motor vehicles which use or intend to use for transportation of goods

• Moreover, ITC shall be allowable for passenger transport vehicles. These are approve seating capacity of more than 13 persons (including driver). In addition, there is no such restriction on ITC in this respect.
Section 17 (5):
Notwithstanding anything contained in sub-section (1) of section 16 and sub- section (1) of section 18, input tax credit shall not be available in respect of the following, namely:—
[(a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely:—
(A) further supply of such motor vehicles; or
(B) transportation of passengers; or
(C) imparting training on driving such motor vehicles;

Only allowed when output service is transpiration of passenger

Otherwise not allowed 

There is no remedy.

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