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ITC on the motor vehicle used for the transportation of employees

10 December 2018

hello sir,

Suppose i am manufacturing company and i have taken bus on the rent for the providing transportation services to employees

Can i Eligible to Claim ITC.

Thanks in advance

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6 Replies

DIPESH SHARMA (132 Points)
Replied 10 December 2018

yes you can claim ITC on bus

Pankaj Rawat (GST Practitioner) (55037 Points)
Replied 10 December 2018

No you cannot . As per Section 17(5) ITC is bock on Motor vehicle

Yes if Government notify Bus Service obligatory for an employer to provide to its employees under any law for the time being in force then you can claim ITC

pritesh (CA Final student) (7101 Points)
Replied 11 December 2018

agreed with pankaj sir

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CA Nikhil Arora (Chartered Accountant) (91 Points)
Replied 11 December 2018

Yes ITC can be availed as it is used in the course or furtherence of the business.

This supply is termed as hiring service, So section 17(5) is not applicable.

The amount paid is known as hirring charges.

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Pankaj Rawat (GST Practitioner) (55037 Points)
Replied 11 December 2018

@ Nikhil

kindly below the Extract from Section 17(5)

iii] rent-a-cab, life insurance and health insurance except where--

[A] the Government notifies the services which are obligatory for an employer to provide to its employees under any law for the time being in force; or

Hence Rent a Cab has the same meaning of hiring Bus , so No ITC can be claim