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ITC on personal car used by managing director

P MURUGAN (ACCOUNTANT) (179 Points)

28 February 2024

A car (mercedez Benz Car) purchased in the name of company name and used by managing director is eligile for Input Tax credit under GST? if not eligible, then the same will sold in future, is GST is leviable for the same car? please give your valuable reply.

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7 Replies

CA Rashmi Gandhi (Chartered Accountant) (86225 Points)
Replied 29 February 2024

Not allowed as same is ineligible u/s 17(5). As you have not claimed input no GST applicable at the time of sale also.

1 Like

Shiva Dubey (132 Points)
Replied 29 February 2024

@ rashmi jee suppose I buy a car 100 + gst 18

now I want to sell what was the amount for sell it is 118 or 100

prasad Nilugal ( GST Practitioner & Accounts ) (14169 Points)
Replied 29 February 2024

If you have not availed input tax credit on car earlier , and sold the same Car in future, then GST applicable on Margin ( Sale Value less Purchase Value or deprecated Value) , please refer notification 8/2018 CT ( Rate) dated 23/1/2018 for other details , and confirm , check any amendments in notification , if no then GST applicable as per the notification .

I hope Car was used for Business Purpose by company .

Take more Opinion on this .

CA Rashmi Gandhi (Chartered Accountant) (86225 Points)
Replied 29 February 2024

Yes but whenever the car was sold , sale value is less than buy value and hence no profit will be booked and no GST will. be payable

P MURUGAN (ACCOUNTANT) (179 Points)
Replied 29 February 2024

Mr prasad nilugal, if car was used for business purpose means as per your terms? please clarify

prasad Nilugal ( GST Practitioner & Accounts ) (14169 Points)
Replied 01 March 2024

GST is essentially a tax on Commercial transactions, hence mainly those supplies that are in the course of furtherance of business qualify as supply under GST , as you mentioned in the query Car purchase in the name of Company , therefore this car must be Asset side on your balance sheet , Also I request you to refer notification, mentioned in my earlier reply.

Take more Opinion .