Can I Claim GST on a Car Registered Under My Company?

[kaushal1y2]

I am considering buying a car in my company's name and wondering if I can claim GST on it.

Are there any special conditions or limitations for claiming GST input tax credit (ITC) on vehicles purchased for business use?

Thanks!

 

[TaxWiser]

I am considering buying a car in my company's name and wondering if I can claim GST on it.

Are there any special conditions or limitations for claiming GST input tax credit (ITC) on vehicles purchased for business use?

Thanks!

Claiming GST input tax credit (ITC) on vehicles purchased for business use does come with specific conditions and limitations under the GST regime. Here are the key points to consider:

General Rule
ITC is not available for motor vehicles with an approved seating capacity of less than or equal to 13 persons (including the driver) if they are used for the transportation of persons.

Exceptions to the General Rule
You can claim ITC on motor vehicles if they fall under the following categories:

1. Vehicles Exceeding 13 Seating Capacity:

• ITC is available for motor vehicles designed to carry more than 13 passengers (including the driver). This typically includes buses used for public or staff transportation.

2. Vehicles Used for Specific Purposes:

• Supply of Vehicles: If your business involves supplying vehicles (e.g., a car dealership), you can claim ITC on motor vehicles used for that purpose, regardless of their seating capacity.
• Transportation of Goods: ITC can be claimed on motor vehicles primarily used for transporting goods in the course of business. This includes trucks, tempos, and other goods carriers.
• Imparting Motor Driving or Training Skills: Businesses that use motor vehicles for imparting driving skills (e.g., driving schools) can claim ITC on such vehicles.
• Transportation of Passengers for Business: If the vehicle is used for transporting passengers as part of your business (e.g., operating a taxi service), ITC can be claimed.

Additional Considerations

• Leasing, Renting, or Hiring: ITC eligibility on leased, rented, or hired motor vehicles depends on the type of vehicle and its intended use.
• Insurance, Repair, and Maintenance: ITC is also available on services like insurance, repair, and maintenance related to eligible motor vehicles.

Documentation
Ensure you have proper documentation, such as a tax invoice, to support your claim for ITC.


However, it's important to consult with a tax professional or financial advisor to understand the specific implications for your situation and to ensure compliance with all regulations.

Hope this Helps

(Source: Conversation with Gemini AI)