ITC ON BUS FOR TRANSPORTATION OF EMPLOYEE, Goods and Services Tax - GST

[HASMUKH PATEL]

We are pharma manufacturer at vadodara-Gujarat. We have purchase five buses ( 56 seater) for transportation of our employee from city to our factory location. We pickup and drop our employees from Vadodara-city to factory and factory to Vadodara-city.

Can we take ITC og GST paid on purchase of BUSES ?

If any case low available pls. share me.

Posts / Replies

[KASTURI SETHI]

Sh.Hasmukh Patel Ji,

This decision can help you. Pl. also read corrigendum mentioned at the end.

2020 (9) TMI 352 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA - IN RE : TATA MOTORS LTD.

Text corrected as per Corrigenda, dated 15-12-2020 as issued by Authority for Advance Ruling under GST, Maharashtra and

As per Corrigenda Published in

2021 (45) G.S.T.L. 432 (25-2- 2021 - Vol. 45 : Part 4)] - 2020 (12) TMI 795 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA

_______

[HASMUKH PATEL]

Dear Sir,

We are not hire buses , but buy the buses for our own used for transportation of our employee from home town to factory and factory to home town. What is about ITC charged on vehicle purchase. We can take ITC or not on invoice of purchase of buses.

[Amit Agrawal]

W.e.f 01.02.2019, relevant portion of Section 17 (5) (a) reads as follows:

"Notwithstanding anything contained in sub-section (1) of section 16 and subsection (1) of section 18, input tax credit shall not be available in respect of the following, namely:-

2[(a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely:-

.........................................."

As buses purchased by you are 56 seater, ITC there-against is NOT blocked under above provision. In other words, you are entitled to avail subject ITC.

Case-law pointed by Shri Kasturi Sethis Ji points to same direction even if same are related to 'renting / hiring services of motor vehicle having approved seating capacity of more than thirteen persons (including the driver)'.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[HASMUKH PATEL]

Thanks a lot.

Any case or court decision on the same point ?

[PAWAN KUMAR]

Dear sir,

I am fully agree with the views of Amit Agrawal sir. ITC of GST Paid on buses purchased for transportation of employees is eligible and allow.

[Shilpi Jain]

The provision of section 17(5) itself supports the view that credit is eligible. That should suffice to take credit.

[KASTURI SETHI]

Yes. If GST Law is very much clear, we need not resort to case law.

[Ganeshan Kalyani]

Input tax credit is eligible on bus.

[HASMUKH PATEL]

See below FQA by CBEC

Q295. Can a company take credit of a motor vehicle with a seating capacity of more than 13 used for transportation of employees?

Ans. From 01-02-2019 section 17(5)(a) of the CGST Act, provides that ITC shall be disallowed on motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver). Hence ITC on motor vehicle with seating capacity of more than 13 is allowed if it is used in the course or furtherance of business including use for transportation of employees. However, prior to 01-02-2019, ITC was not allowable.

[Aniket Patil]

Hello Sir/Madam,

I am a contractor offering bus services to corporates for transportation of their employees.

Can you please tell me if I can avail ITC on purchase of vehicles and spare parts, etc.

Also, can anyone please clarify the GST slab and HSN code in my case?

Thank You,

Aniket.