We are into the business of Line Production and Shooting Services (Media & Entertainment Industry). Can we claim ITC on purchase of Vanity Vans used on the sets/shooting.
Please refer to Section 17(5) of CGST Act 2017 that deals with blocked/ineligible credit.
Section 17(5)(a) says -
(a) input tax credit shall not be available in respect of the following, namely:- motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely:- (A) further supply of such motor vehicles; or (B) transportation of passengers; or (C) imparting training on driving such motor vehicles;
The above implies that if a vehicle is used for transportation of persons and it's seating capacity is less than 13 then ITC is allowed only in 3 cases.
- Supplier of cars (further supply of such motor vehicles)
- Ola/Uber/Taxi (transportation of passengers)
- Driving Schools (imparting training on driving such motor vehicles)
Coming to Vanity Van
The seating capacity is less than 13 and it can be used for transportation of persons. Also, none of the above 3 exceptions are applicable in your case. Hence it seems that ITC is not available for Vanity Vans if your main business is Line Production and Shooting Services (Media & Entertainment Industry).
If you are supplying Vanity Van on hire separately and billing separately than ITC will be allowed as it will be covered under "further supply of such motor vehicles".
As per Section 7 of CGST Act 2017, the supply includes "all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business".
But if it is a single supply of Line Production and Shooting Services then ITC will not be eligible.
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