Case Law Details
In re M/s. Orix Auto Infrastructure Services Limited (GST AAR Kerala)
Whether the applicant Is eligible to take credit of the input tax credit as defined in Sec.2(g) of the GST (Compensation to States) Act. 2017 of the Cess paid on purchase of motor vehicles used in providing services of transportation of passengers or renting of motor vehicles given the fact that as a matter of business policy, the said motor vehicles would be initially used for supply of rental business services and disposed of after three or four years of such use.
Considering the provision envisaged in Rule 43 of GST Rules, applicant is eligible to ITC of entire amount of Compensation Cess paid on the purchase of vehicles used for rental business. Such ITC claimed shall be reversed every month equally apportioned over the prescribed period of 60 months to the extent of usage of exempted supply of service. As per Rule 43(c) of GST Rules, applicant is eligible to claIM ITC of Compensation Cess paid at the time of purchases of Motor Vehicles’ and need to reverse a proportionate amount of ITC every month based on the turnover of rental service business and utilin-balance ITC for discharging liability of Compensation Cess arising at the lime of sale of such vehicles.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, KERALA
The petitioner is supplying services of transportation of passengers or renting of Motor Vehicles (internally called as RAC business) with or without chauffeurs and also leasing of vehicles. The petitioner operates the renting and leasing business as separate division. The motor vehicles procured for renting business are exclusively used for the said business and the same are not interchanged with those in respect of leasing business at any point of time until their disposal. The motor vehicles purchased for the above business is capitalized in the books of accounts.
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