To understand this point lets read the law as below:-

As per Section 17(5) of CGST Act Input tax credit shall not be available in respect of the following, namely:—

motor vehicles and other conveyances except when they are used–

(i) for making the following taxable supplies, namely:—

(A) further supply of such vehicles or conveyances ; or

(B) transportation of passengers; or

(C) imparting training on driving, flying, navigating such vehicles or conveyances;

(ii) for transportation of goods;

Now the point is whether Bike and Scooty cover in “motor vehicle” or not?

As per Section 2(76) of CGST  ACT :- “motor vehicle” shall have the same meaning as assigned to it in clause (28) of section 2 of the Motor Vehicles Act, 1988;

As per clause (28) of section 2 of the Motor Vehicles Act, 1988:- “motor vehicle” or “vehicle” means any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding twenty-five cubic centimeters

Here  cubic centimeters mean CC engine capacity, Hence Bike and scooty having engine capacity more than specified limit will be covered in motor vehicle and ITC will be not eligible as per section 17(5) CGST ACT.

CA UMANG GARG

caugar@gmail.com

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13 responses to “IS ITC Available on Bike and Scooty?”

  1. Snowy says:

    Further the Scooty should has more than four wheels and CC above 26

  2. Snowy says:

    There is no need to read much into the M.V.Act. The ITC would be available if Sccoty is
    (i) used for
    (A) further supplied, I.e on receipt from O.E manufacturer, the dealer can take credit and utilise the credit while supply to Customer or another Dealer
    (B) used for transportation of passengers I.e as a scooter taxi, and the service provider being registered
    (C)used for imparting training, I.e by a Driving Institute imparting training for driver’s license and the institute is registered.
    (ii) used for transportation of goods I.e the transporter has to be registered, the service being supply for transportation of goods by road

    • caugarg@gmail.com says:

      You are right…but for these condition are apply only in motor vehicle….if scooty does not cover in motor vehicle then no need to read these condition …hence it is necessary to read m.v. act.

  3. PRASHANT JAIN says:

    As per my understanding ITC can be claimed as scooty have less than four wheels

  4. CA C V SURYAM says:

    One more exception for ineligibility is that if the two wheeler is used as two wheeeler cab (once upon a time this concept was in existence for a short period), then ITC can be availed. Is it not?

  5. RAMJIYAHOO MAHADEVAN says:

    The final answer is not clearly explained, the live example of Honda activa, Honda shine, bajaj boxer, TVS star , tvs scooty are eligible for input credit if they are used for transportation of goods like newspapers, vegetables, milk

    • Amit Walia says:

      I think it is pretty clearly explained, all these scooties are near to 100 CC, so but obvious out of preview of input credit being available, if you have commercial license of two wheeler off-course you can claim ITC

    • caugarg@gmail.com says:

      Please read full line:- vehicle having less than four wheels fitted with engine capacity of not exceeding twenty-five cubic centimeters.
      If your vehicle is less than 25 cc capacity than it will not cover in definition of motor vehicle.

    • caugarg@gmail.com says:

      Yes ITC is available if motor vehicle is used for transport of goods. It is cleared explain in section 17 (5) of CSGT act

  6. Anupriya says:

    Hell Mr. Garg, Pls give a light on the words mentioned under section 2(28) of the Motor vehicle Act ,1988 ” that motor vehicle does not include a vehicle having less than four wheels” . Since Bike and Scooty are having 2 wheels only they can not be categorised as Motor Vehicle”. Accordingly ITC will be eligible on these vehicle.

    • Amit Walia says:

      Not only Wheels to be counted, but even CC have to be seen, if CC less than 25 can claim ITC, if CC more than 25 CC no ITC

    • Varun says:

      Hell Anupriya, read complete sentence, not only half part of any act.

    • caugarg@gmail.com says:

      Please read full line:- vehicle having less than four wheels fitted with engine capacity of not exceeding twenty-five cubic centimeters.
      If your vehicle is less than 25 cc capacity than it will not cover in definition of motor vehicle.

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