ITC of GST paid on hiring of bus for transportation of employees is allowed: AAR

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  • Last Updated on 24 April, 2022

GST Input Tax Credit; ITC

Case Details: Maanicare System India (P.) Ltd., In re - [2022] 137 taxmann.com 136 (AAR - MAHARASHTRA)

Facts of the Case

The applicant is a private limited company, engaged in the business of providing manpower services. It has hired a 49 seater bus for transportation of its employees. It is paying the GST under the reverse charge mechanism on such hiring services. The application of advance ruling was filed to understand if he can avail the input tax credit (‘ITC’) of GST paid on such services under reverse charge.

AAR Held

The AAR in this case observed that services were being received by the applicant in the course or furtherance of business. Moreover, Section 17(5) excludes the input tax credit on leasing, renting or hiring of motor vehicles for transportation of persons, having an approved seating capacity of more than thirteen persons (including the driver). The AAR held that the applicant is eligible to avail the ITC. However, ITC prior to February 01, 2019, is not eligible in view of the specific restriction as it was there earlier under Section 17(5) of the CGST Act.

List of Cases Referred to

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One thought on “ITC of GST paid on hiring of bus for transportation of employees is allowed: AAR”

  1. Sir,
    we are registered dealer of Works Contractor

    we purchase on 50 seater staff bus, for our own employees transporting to site
    can we eligible the GST-ITC on Bus purchase invoice

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