In re Royaldrive Pre Owned Cars LLP (GST AAR Kerala)
Royaldrive Pre Owned Cars LLP, engaged in the buying and selling of used luxury cars, sought an advance ruling on the eligibility of input tax credit (ITC) for various business-related expenses under Notification No. 8/2018-Central Tax (Rate). The applicant specifically questioned ITC availability on expenses like spare parts, refurbishment services, office rent, telephone, advertisement, and professional charges, while complying with the provisions of the CGST and KSGST Acts. The Authority for Advance Ruling (AAR) Kerala clarified that ITC is not available on the purchase of old or used vehicles for resale, as per Notification No. 8/2018. However, the AAR ruled that ITC can be availed on other business-related expenses such as repairs, refurbishment, rent, and professional services, which directly or indirectly enhance the sale value of the used vehicles. The ruling emphasized that these expenses are used in the course or furtherance of business and are not restricted by the notification. The decision aligned with the Karnataka AAR’s stance in a similar case, ensuring clarity on ITC applicability for indirect business expenses under GST regulations.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, KERALA
1. M/s. Royaldrive Pre Owned Cars LLP, TM Building, Machingal, Melmuri, Malappuram (hereinafter referred to as “applicant”) is a limited liability partnership registered under CGST and KSGST Act bearing GSTIN 32AAUFRO385F1Z2 engaged in the business of inward and outward supply of old and used luxury cars.
