As per Sec 17(5),ITC for Motor Vehicle purchased and used for the purpose ofTransportation of Passengers is allowed. The concept of rent-a-cab is originating from ‘rent-a-cab' scheme, 1989 framed u/s 75 of Motor Vehicles Act, 1988. For Motor Vehicles: Input Tax Credit for motor vehicles used for transportation of passengers having seating capacity of up to 13 passengers is generally not available. One can claim ITC on a motor vehicle for making Taxable supplies in the cases below-. A motor vehicle does not include a trolley bus or a vehicle designed or adapted to be operated only on rails. Corporations can claim the full HST ITC if the passenger vehicle is used primarily (over 50%) for commercial activities. As with all expense claims, make sure you keep all related receipts so you can back up your … The Author of the above article is Aditya Kishore, ICAI. Read point 4 for GTA case ) 1. B). Hi Sharon, There are special and strict rules for claiming input tax credits on vehicles. Cases where ITC on motor vehicle repairing/ insurance services is available even after amendment. The said entry may cover expenses relating to repair, insurance and maintenance of motor vehicles and ITC on such services could be availed only in the same circumstance as applicable to the motor vehicles. Motor Vehicles for transportation of persons : Thus, ITC on repairing, maintenance and insurance of motor vehicles for transportation of persons carrying more than 13 persons will be admissible. Admissibility of the application. The language in the new Amended Act is like:- ” 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:— One stop solution for Income Tax, GST, ICAI, ICSI, ICMAI and other updates. This is a broad term and it is expansive. ITC of motor vehicles used for the carriage of goods is freely available. In the pre-GST era, CENVAT credit for expenses like insurance or repair and maintenance in respect of motor vehicle … 1. a. further supply of such vehicles or But reality is that ITC is not available on motor vehicle providing transportation with seating capacity less than or equal to 13 passengers (including the driver). A motor vehicle does not include a trolley bus or a vehicle designed or adapted to be operated only on rails. But the Provision contains some exceptions. Approved seating capacity, not more than thirteen, including the driver: ITC is blocked/ ineligible. ITC of motor vehicle is restricted until the amendment in CGST Act. As per my opinion ITC on insurance of motor vehicle used for the purpose of transportation of goods is not available as per CGST Amendment act 2018.But Govt has not notified the applicability of section 17 of amendment act.Hence you can take ITC on insurance of Motor Vehicle. Yes, an Input tax credit of trucks is freely available. ITC of some disputed items like fork trucks was causing issues. The person engaged in such transportation using motor vehicle, may have to take care that he cannot avail credit if he pays GST at concessional rate under notification where there is restriction to avail credit or the recipient pays under reverse charge[RCM]-such as GTA[where transporter of goods by road is done and vendor issues consignment note/bilti and recipient registered person pays freight and GST under RCM], Credit on motor vehicle insurance, repairs: For period till Jan 2019. The department may take a view that 'cab' covers motor cab and maxi cab/any motor vehicle to carry more than 12 passengers excluding driver. b. Govt notifies the services which are obligatory for an employer to provide to its employees under any law for the time being in force. The customers who visit Hotel/Resort, can use such Car as Taxi on Paid basis, if … OR ELSE As per Sec 17(5), ITC is Blocked, of Motor vehicle is having Seating upto 13 (including driver). ABC limited is the manufacture of vehicles then ITC will be available for the procurement of related input goods or services. Motor Vehicle for transportation of … As most people are aware, pickup trucks can cost substantially more than … Vehicle ITC and CCA. So, ITC … A Motor vehicle is an automotive vehicle designed or adapted for use on highways and streets. Warm Regards. Further, ITC is not available on vessels and aircraft. ITC pertaining to motor vehicles is restricted in few cases. Depends on the use of the vehicle. Exceptions ITC will be available if the given vehicle is being used for. Insurance premiums are treated differently for taxation purposes depending on whether a motor vehicle owner is registered for Goods and Services Tax (GST) and has an Input Tax Credit (ITC) entitlement. ABC Company bought a Taxi and started providing Services of transportation to passengers. Example … Click here to Join Tax Updates Whatsapp Group by Sharon (Manitoba) We have recently purchased a couple of used vehicles for our business. When input tax credit for purchase and maintenance of the motor vehicle will be available in GST. > No ​​ITC allowed for ​Motor Vehicles for transportation of persons if seating capacity is upto 13 persons. Let us have a look on modifications. Motor Vehicle for transportation of persons … As now restriction is only on passenger vehicles. Even the ITC of JCB, cranes etc will also be … 1. I use Quickbooks if that makes any difference. Business-> Automobiles, Passenger Vehicles and Motor Vehicles-> Vehicle definitions Vehicle Definitions For Tax Purposes. Required fields are marked *. It maybe noted that the missed out credit related to 2017-18 maybe availed before the filing of GSTR 3B returns for March 2019. GST Whereas, for the motor vehicle with the seating limit of more than 13 people there is no such restriction to avail ITC on such vehicle. Thus the above reduced GST rates and NIL cess rate would be applicable on sale of old vehicles. View Profile | My Other Post. Section 17(5) of CGST Act 2017 has given list of items on which input tax credit (ITC) is blocked. 3. ITC on renting motor vehicles for period from Feb 2019. • The applicant is not eligible for input tax credit of GST charged by the Contractor for hiring of buses/cars for transportation of employees. In this case, GST paid on buying Taxi will be available as ITC. This has led to non-availment of eligible credit in several instances by assesses. A business entity is providing training “How to drive” to its customers. Before that period old provisions will be applicable but after that, you can take the ITC for a wider range. Credit on motor vehicles used for transport of goods from July 2017 onwards. Similarly, when the materials are transported to site in truck by contractor supplying taxable construction services. Since he is a dealer and cars are his stock in trade, he can take ITC of Rs 4 lakh and pay only Rs. When input tax credit for purchase and maintenance of the motor vehicle will be available in GST. Do I get to claim this back? Rent-a-cab services, life insurance, health insurance. Driving Academies buy cars to teach driving to their students. Thus, ITC is not allowed "in respect of" motor vehicles and other conveyances except in specified cases. Whether Purchase of Car is Input or Capital Goods If car used for … Limited Period Offer Avail 20% discount in all subjects CA,CS and CMA,Coupon- OFFER20 Call: 088803-20003, CA Roopa Nayak  Cases where ITC on motor vehicle repairing/ insurance services is available even after amendment . c. imparting training on driving, flying, navigating such vehicles or Thank you very much for your help. Then it can claim ITC of GST paid on their vehicles. The terms renting and leasing of motor vehicles are different and only ITC of the renting of motor cab is restricted under GST. Input Tax Credit (ITC) on Motor Vehicles. CCA vehicle classification information is presented as follows: Rules and Definitions : Class 10: Class 10.1: Maximum CCA claimable: … Now provisions for ITC of a … by Sherrill Using your example from How to Claim Input Tax Credits Relating to Business Use of Your Personal Vehicle: "IF your personal vehicle costs $27,000 after taxes and you use it 40% for business, you would have claimed $1,620 ($27,000 x 15% CCA rate for first year x 40%) CCA on your tax return. Input tax credit can be availed on the goods/services used in course of business of making taxable supplies of goods/services or exports. AMIT BHATTKOTI 15 September 2019. 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