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Amit (Accounts )     18 September 2021

Motorcycle ITC

Hy All,

Recently we purchased a motorcycle in the name of our proprietorship firm.

Can we get ITC of motorcycle purchase & it's repair.


 12 Replies

Aniruddha Patra

Aniruddha Patra   18 September 2021

No u cannot claim itc
1 Like
Amit

Amit (Accounts )     18 September 2021

Why...we using it in daily busniess activities.
Aniruddha Patra

Aniruddha Patra   18 September 2021

As per Section 17(5) of CGST Act Input tax credit shall not be available in respect of the following, namely:—

motor vehicles and other conveyances except when they are used–

(i) for making the following taxable supplies, namely:—

(A) further supply of such vehicles or conveyances ; or

(B) transportation of passengers; or

(C) imparting training on driving, flying, navigating such vehicles or conveyances;

(ii) for transportation of goods;

Now the point is whether Bike and Scooty cover in “motor vehicle” or not?

As per Section 2(76) of CGST  ACT :- “motor vehicle” shall have the same meaning as assigned to it in clause (28) of section 2 of the Motor Vehicles Act, 1988;

As per clause (28) of section 2 of the Motor Vehicles Act, 1988:- “motor vehicle” or “vehicle” means any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding twenty-five cubic centimeters

Here  cubic centimeters mean CC engine capacity, Hence Bike and scooty having engine capacity more than specified limit will be covered in motor vehicle and ITC will be not eligible as per section 17(5) CGST ACT.

Further , GST Amendment Act 2018 applicable with effect from 01 Feb 2019 states that ITC under 17(5) will be blocked for Motor vehicles for transportation of persons having approved seating capacity of not more than 13 persons.

Earlier ITC was prohibited for all motor vehicles and now seating capacity criteria has been inserted in new clause.  Bikes are any way are having sitting capacity of less than 13 person .

Hence , it is cleared that ITC is not eligible on purchase of Bikes unless it is used for specific purposes as mentioned in Para 2 above .
1 Like
Sourav

Sourav (Student)     19 September 2021

No itc is blocked
1 Like
Amit

Amit (Accounts )     19 September 2021

Thank you
Sravan Reddy G

Sravan Reddy G (Ca_Articalship)     19 September 2021

U can't take ITC as per block credit sec 17(5)
1 Like
Amit

Amit (Accounts )     19 September 2021

Can we claim exp of its repairs
Sravan Reddy G

Sravan Reddy G (Ca_Articalship)     19 September 2021

No U can't claim ITC on that repair expense only since your main asset is come under blocked credit concept.
Amit

Amit (Accounts )     19 September 2021

Thank you ..
You mean ...we can claim exp, without ITC ?
Sravan Reddy G

Sravan Reddy G (Ca_Articalship)     19 September 2021

Yes u can take it to profit and loss account
Amit

Amit (Accounts )     19 September 2021

Thank you..
what about car purchased for proprietor ...for business use.
Sravan Reddy G

Sravan Reddy G (Ca_Articalship)     19 September 2021

Same section applies for that also
1 Like

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