The circular clarifies the availability of input tax credit on ...

Input Tax Credit Available for Demo Vehicles Used for Trials, Not for Staff Use; Conditions Apply for Capitalized Vehicles.

November 9, 2024

Circulars GST - States

The circular clarifies the availability of input tax credit on demo vehicles used by authorized dealers for providing trial runs and demonstrating features to potential buyers. It covers two key issues: availability of ITC on demo vehicles u/s 17(5)(a) of the CGST Act, and availability of ITC where demo vehicles are capitalized by dealers. The circular states that demo vehicles promote sale of similar vehicles and are thus used for 'further supply', qualifying for ITC u/s 17(5)(a)(A). However, ITC is not available if vehicles are used for staff transportation. For dealers acting as agents, providing test drives on behalf of manufacturers, ITC is not available as they are not making further supply. The circular also clarifies that capitalization of demo vehicles does not impact ITC availability, subject to conditions like depreciation claims under Income Tax Act. Dealers must pay applicable tax when subsequently selling capitalized demo vehicles.

View Source

← Previous Next →

The circular clarifies the availability of input tax credit on ...

Input Tax Credit Available for Demo Vehicles Used for Trials, Not for Staff Use; Conditions Apply for Capitalized Vehicles.

November 9, 2024

Circulars GST - States

You may also like:

Inward supply of motor vehicles used for demonstration purposes in the course of business of supplying motor vehicles cannot be availed as input tax credit on capital...

Input tax credit (ITC) - Demo vehicle purchased - There is clear provision in law for admissibility of Input tax credit on motor vehicles in any of' the three conditions...

This circular clarifies the availability of input tax credit (ITC) on demo vehicles used by authorized dealers of motor vehicles. Key points are: ITC is available on...

Availment and setting off of Input tax credit (ITC) - purchases of demo vehicles - car dealer - The demo vehicles are purchased all along for further supply with the...

This trade circular clarifies the availability of input tax credit (ITC) on demo vehicles used by authorized dealers for motor vehicles. The key points are: ITC is...

The summary focuses on the availability of Input Tax Credit (ITC) for demo vehicles used by authorized dealers. The Haryana Government issued a circular clarifying that...

Adjustment of tax liability – Out of input tax credit available – dealer can adjust current year tax liability out of Input Tax Credit available in credit of dealer -...

Input Tax Credit - solar power panels procured and installed - blocked credit- When Electricity energy manufactured using the Solar Panels were supplied to TANGEDCO...

Utilisation of Input Tax Credit - outward supply of Gold & Silver bullion - The applicant/appellant can use the Input Tax Credit Balance available in its Electronic...

Reversal of Input Tax Credit - inputs consumed in dye intermediates (which is also a finished goods), where such goods have been destroyed in fire - - Since the said...

The ruling addressed the eligibility of Input Tax Credit (ITC) for cars used for demonstration purposes. It was held that demo cars can be eligible for ITC if certain...

Entitlement to Input Tax Credit (ITC) - Inward supply of Car / Demo cars - Car used for demonstration purpose to the potential customer interested in buying Mercedes...

Input tax credit - Capital Goods (demo cars) - The Demo Vehicles received by the Appellant have never been received with the intent to simply 'further supply/ sell' as...

The AAR held that input tax credit is not available on motor vehicles with an approved seating capacity of less than or equal to 13 persons (including driver), except...

CENVAT Credit - The input service credit cannot be denied on the ground that it is shown in the ER1 return instead of the ST3 returns since the cross utilization of...

Quick Updates: