ITC on Mercedes purchase not eligible as applicant opted for a lower tax rate  

In re Noori Travels (GST AAR Telangana)

Noori Travels, a transportation service provider, sought clarification regarding the eligibility of Input Tax Credit (ITC) on the purchase of a Mercedes Benz CKD v213 e220d Exclusive MY 23 1.0. The applicant initially opted for a lower tax rate of 5% without claiming full ITC. However, from August 1, 2023, they transitioned to a higher tax rate of 12% with full ITC utilization.

The applicant aimed to claim ITC on the GST paid for the Mercedes purchase, amounting to Rs. 13,94,702. Despite the invoice being uploaded in July 2023, the purchase and sale certificate were dated August 4, 2023.

The ruling clarified that since the applicant chose not to avail full ITC previously, forfeiting their right to claim it on earlier purchases, they cannot retroactively claim ITC on the Mercedes purchase made in August 2023. Therefore, the Rs. 13,94,702 GST amount is not eligible for ITC utilization.

FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, TELANGANA

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