The Authority for Advance Ruling (AAR) Madhya Pradesh has ruled that Input Tax Credit (ITC) is available on GST paid on vehicles provided to different customers on lease rent.
The Applicant M/s Narsingh Transport, based in Ujjain, is providing ‘Goods Transport Agency Service’. The applicant while purchasing cars for their business purpose i.e. for providing to other companies on a monthly lease rent under a lease agreement has paid GST as applicable. The applicant had desired the advance ruling on whether the GST paid on these cars will be available to it as ITC in terms of section 17(5) of CGST Act, 2017.
Additional Commissioner of CGST and Central Excise, Rajiv Agarwal and Joint Commissioner of Commercial Tax, Manoj Kumar Choubey while processing the application was of the point of view that, “The applicant is entitled to avail ITC on vehicle which are further supplied to customers on lease rent, subject to condition apllicable as per section 17(5) of CGST Act, 2017, Madhya Pradesh Goods and Service Tax Act, 2017 and notifications number 11/2017* central tax (Rate) dated 28 June, 2017, state notification No. F-A-3-32—2017-1-V(41) dated 29 June, 2017 read with amendments. Such Vehicles must be registered for commercial use and permit holder as per section 66 under Motor Vehicle Act, 1988.”
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