Multipal Business in Single GST input use, Goods and Services Tax - GST

[KS Bhat]

Sir/Madam

Mr A having Single GST number (regular)

Runs two type of Business

1. Own vehicale (Car ) renting Service

He is not collecting GST on renting and hiring service instead it will be dealcred as RCM nature and service receiver will pay the GST

2. Condiments Shop

Input of car (Yello Board) purchase is also used in total tax liability of business

Is this correct ?

Can he take input of car purchase while discharging Shop tax liability ?

 

Posts / Replies

[RAHUL MODI]

Relevant Extract of Section 17(5)(a) of the CGST Act, 2017

As per Section 17(5)(a) of the CGST Act, 2017, input tax credit on motor vehicles for transportation of persons having an approved seating capacity of not more than 13 persons (including the driver) is blocked, except when used for:

1. Further supply (sale) of such vehicles

2. Transportation of passengers

3. Training in driving such vehicles

1. Car Rental Service (Own Vehicles) – Taxable under RCM

• If the vehicle is used exclusively for providing passenger transportation services, ITC may be available.
• However, since the taxpayer is supplying car rental services under RCM, there is no outward GST liability, which may restrict ITC availability as per Rule 42 of CGST Rules.

2.  Condiments Shop

• Since a condiments shop primarily deals with goods, the key factor would be whether the vehicle is used exclusively for transporting goods.
• If the car is not registered as a goods transport vehicle, ITC is blocked under Section 17(5)(a).