In
this article we have attempted to simplify clarity regarding input tax credit
claimed in respect of motor vehicles. Up to 31-01-2019, there was no restriction
under sub-section (5) of section 17 in availing input tax credit of tax paid on
repairs and maintenance of vehicles. Hence, input tax credit of tax paid on
repairs and maintenance of any type of vehicle was allowable.
With
effect from 01-02-2019, the CGST (amendment) Act, 2018 has amended sub-section
(5) of section 17. As per clause (ab) of subsection (5) of section 17, input
tax credit of tax paid on general insurance, servicing, repair and maintenance
service is allowable in so far as they relate to the following motor vehicles:
A. Motor
vehicle for transportation of person having approved seating capacity of not
more than thirteen person (including the driver)
B. Motor
vehicles for transportation of persons having approved seating capacity of not
more than thirteen persons (including driver), when they are used for making
the following taxable supplies, namely:-
·
Further supply of such motor vehicles;
or
·
Transportation of passengers; or
·
Imparting training on driving such motor
vehicles;
C. Motor
vehicles used for transportation of goods;
D. Where
such service is received by a taxable person engaged-
·
In the manufacturing of such motor
vehicles, vessel or aircraft; or
·
In the supply of general insurance
services in respect of such motor vehicles, vessel of aircraft insured by him.
In
view of the above provisions, GST paid on repairs and maintenance of conveyance
used for transportation of passengers by road, allowable as input tax credit.
Disclaimer: All the Information is based on the
notification, circular and order issued by the Govt. authority and judgement delivered by the court or
the authority information is strictly for educational purposes and on the basis of our best understanding of
laws & not binding on anyone.
