2019 (1) TMI 1389 - AAR - GST

Admissibility of input tax credit of tax paid or deemed to have been paid on vehicles - Whether they can utilize/ refund the ITC which is readily available in GST Portal, for the vehicles purchased by them for the purpose of their core business activity? Held that - The Input Tax Credit on the vehicles purchased by the applicant for the purpose of their business will fall under Section 17(5) - It is clear from the plain reading of the section, that the goods referred by the applicant do not fall under the exceptions referred in Section 17(5) of CGST / APGST Act, 2017. Hence the applicant is not entitled for claim of ITC.

Summary

Issues:
Admissibility of input tax credit of tax paid or deemed to have been paid for vehicles purchased for core business activity.

Analysis:
The case involved M/s. INDIAN COTTON SOLUTIONS.COM PRIVATE LIMITED, engaged in providing Mobile Laboratory Services to test the quality of Cotton. The applicant sought an advance ruling on the admissibility of input tax credit for vehicles purchased for their core business activity. The jurisdictional officer confirmed no pending proceedings related to the applicant. A personal hearing was conducted where the applicant's representative argued that the vehicles were essential for their business as mobile cotton labs. However, the Authority examined the issue under Section 17(5) of the CGST/APGST Act, which states that input tax credit is not available for motor vehicles unless used for specific purposes like further supply, transportation of passengers, imparting training, or transportation of goods.

The Authority concluded that the vehicles purchased by the applicant did not fall under the exceptions listed in Section 17(5) of the CGST/APGST Act. Therefore, the applicant was not entitled to claim input tax credit for the vehicles. The ruling was based on a plain reading of the section, which clearly stated the conditions under which input tax credit for motor vehicles is permissible.