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No more input tax credit on automotive invoices

According to a recent government notification, one cannot claim GST on the purchase, repairs and insurance of a company-registered vehicle. While such a clause was already present under GST, the government has added a clarification to avoid misinterpretation.

As per the amendment, input tax credit shall not be available on vehicles that can seat up to 13 people (including the driver), except if they are used for transportation of similar vehicles, passengers or for training new drivers.

Similarly, tax paid on insurance and maintenance cannot be claimed on vehicles that are used for anything other than business purposes. Input tax credit will be available for a taxable person engaged in the manufacture of such vehicles. 

Input tax credit shall be available on vehicles used for the purpose of manufacture of taxable goods and / or for offering taxable services.

 
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