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TMI Blog2021 (1) TMI 692X X X X Extracts X X X X X X X X Extracts X X X X ..... NI PRASAD TIWARI COLONY ward no. 32 Jabalpur Madhya Pradesh (482001). The Applicant is having a GST registration with GSTIN 23AAUFK1834E1ZE. 2. The provisions of the CGST Act and MPGST Act are identical, except for certain provisions. Therefore, unless a specific mention of the dissimilar provision is made, a reference to the CGST Act would also mean a reference to the same provision under the MPGST Act. Further, henceforth, for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST or MP GST Act would be mentioned as being under the GST Act. 3. BRIEF FACTS OF THE CASE 3.1 The application has been tiled u/s 97 of MP GST Act 2017 and CGST Act 2017 (hereinafter referred to as the SGST Act and CGST Act) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16(1) of the CGST Act, 2017 clearly states that "Every registered person shall he entitled to take credit of input tax charged on any supply of goods or services or both which are used or intended to he used in the course or furtherance of his business-. 6.2 It was also argued that the provisions of Section 2 (19) of the CGST Act, 2017 are as follows - "Capital goods" means goods. the value of which is capitalized in the books of account of the person claiming the input tax credit and which are used or intended to he used in the course or furtherance of business". 6.3 Applicant also quoted Section 17(5)(a) of the CGST Act. 2017 and argued that Input tax credit will not be available in respect of motor vehicles and other conveyances except ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed purchase of demo car is in the course or furtherance of business. applicant should be eligible for input tax credit. 6.5 The Applicant in support of his argument said that - recently few advance rulings were pronounced which endorses the view that ITC is allowed on capital goods being demo cars : - 1. A. M. Motors (2018) (AAR, Kerala) = 2018 (10) TMI 514 - AUTHORITY FOR ADVANCE RULINGS, KERALA 2. Chowgule Industries (P.) Ltd. (2019) (AAR, Goa) = 2019 (7) TMI 844 - AUTHORITY FOR ADVANCE RULING, GOA 3. Chowgule Industries Private Limited (GST AAR Maharashtra) = 2020 (1) TMI 741 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA 6.6 The Applicant also gave following declaration - a) That we have purchased the vehicle against tax invoice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant purchases demo vehicles from the supplier against tax invoices after paying tax, and capitalizes the said demo vehicles in his books of accounts. According to the Applicant, Demo Vehicles are used for furtherance of business and are used for imparting training about the features of the vehicle and training on driving such vehicles to the prospective buyer. and the same are used for test drive of the similar vehicle model which will generate taxable revenue and help the applicant in furtherance of their business. The Applicant submitted that every model of the car is used for demonstration for a limited period and is usually replaced every two years or 40000 kms or up to continuation of model, whichever is earlier. It is also submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hicles. The provisions of Sec. 17(5) are exception to Sec. 16. This is very clear from the initial para of Sec. 17(5) which says - "Notwithstanding anything contained in sub-section (1) of Sec. 16......". Therefore, for deciding the eligibility of Input tax credit on Demo Vehicles. the provisions of Section 17(5)(a) of GST Act. 2 (117 arc relevant which debars the applicant from taking Input tax credit. except in the situations described in Clause (A). (B) and (C). A reading of Section 17(5)(a) indicates that Input tax credit shall be available in respect of motor vehicles which arc further supplied as such. or which are used for transportation of passengers. or which are used for imparting training on driving of such vehicles. By subse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.5 Thus, we find that there is clear provision in law for admissibility of Input tax credit on motor vehicles in any of' the three conditions prescribed in clause (A), (B) and (C) of Section 17(5)(a) of GST Act. As the applicant's Demo vehicles do not comply any of the said conditions. therefore. the applicant is not eligible for Input tax credit on Demo vehicles in view of provisions of Section 17(5)(a) of GST Act in spite of the filet that the Demo Vehicles are used by the applicant for furtherance of their business. 8. RULING 8.1 Considering the Arguments and submissions made by the Applicant in respect of the Question raised before this authority. it is ruled that the Applicant is not eligible for Input Fax Credit on Demo veh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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