ITC Claim Allowed on Vehicle Modified and Supplied as Ambulance

By Bimal Jain Goods and Services Tax Judiciary April 29, 2023

TaxGuru Citation: 2023 taxguru.in 2468
Case Name: In re Raminfo Limited (GST AAR Telangana)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: Advance Rulings, Telangana AAR

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In re Raminfo Limited (GST AAR Telangana)

AAR, Telangana in M/s. Raminfo Limited through its order number TSAAR Order No. 02/2023 dated April 3, 2023, has determined that the assessee is eligible to avail Input Tax Credit (ITC) on the purchase of a 7-seater vehicle, which will be subsequently converted into an ambulance for onward supply.

Facts:

M/s. Raminfo Limited (“the Applicant”) has a work order from the Government of Tripura for supply of ambulances (Mobile Common Service Centres). For this purpose, they are procuring Maruti Suzuki Eeco (7 seater) and modifying the same in their workshop in Hyderabad, Telangana State.

The Applicant filed an advance ruling before the AAR, Telangana to seek clarity on the following matter viz., rate of GST for the supply of goods, admissibility of ITC on purchase of vehicles and other components.

Issues:

Whether the Applicant is eligible to take ITC on purchase of Maruti Suzuki Eeco (7 seater) which will be transformed into an ambulance?

Held:

The AAR, Telangana in TSAAR Order No.02/2023 held as under:

Observed that, the Applicant will purchase the Maruti Suzuki Eeco (7 seater) and thereafter he will transform such vehicle into an ambulance and will supply such ambulances to the Government of Tripura.
Noted that, the purchased vehicle falls under HSN 8703 which inter alia covers “Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702)”.
Further noted that, as per Section 17(5)(a) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) the ITC on purchase of vehicles which are meant for further supply is not a blocked under Section 17(5) of the CGST Act.
Held that, the Applicant is eligible to take ITC of tax paid on purchase of vehicle which is used in furtherance of his business and the Applicant will charge GST @ 28% as per Schedule IV of the Notification 01/2017-Central Tax (Rate) dated June 28, 2017 (“Goods rate notification”) on supply of ambulance to the Government of Tripura.

Relevant Provisions:

Section 17: Apportionment of Credit and block credit