Page 8 - Ch_10 ITC

Sec 16(4):- Time limit for availing ITC

CCP 09.02.09.00
What is the time limit for taking ITC and reasons therefor? [Study Mat]
Answer:
Ü As per section 16(4) of CGST Act, time limit for availing ITC by registered person for any invoice or debit
note shall be earlier of following dates:-

† 30th day of November following the end of financial year to which such invoice or debit note pertains or
† Furnishing of the relevant annual return.
Ü However, there is no time limit for re-availing the credit that had been reversed earlier.
Ü As per section 18(2), in special circumstances like new registration, voluntary registration, etc.,

registered person can take ITC within 1 year from date of issue of tax invoice by supplier.

03. Section 17(5):- Blocked Credits (Negative List)

Sec 17(5)(a):- Motor Vehicles
CCP 10.03.10.00
SRS Cars Pvt. Ltd., a car manufacturer, purchased a tempo Traveller (Seating capacity of 15 persons)
for the transport of its employees within the factory premises. Can SRS Cars Pvt. Ltd. avail ITC on such
purchase? Will your answer differ, if seating capacity of tempo traveller is 10 persons?

Answer:
Legal Provision:-
Ü As per section 17(5)(a) of CGST Act, ITC is not available on Motor vehicle for transportation of persons
having approved seating capacity of not more than 13 persons (including driver), except when they are
used for making following taxable supplies:-

a) Further supply of such motor vehicles or
b) Transportation of passengers or
c) Imparting training on driving such motor vehicles.

Discussion & Conclusion:-
Ü In first case, SRS Cars Pvt. Ltd. purchased a tempo Traveller with seating capacity of 15 persons which is
exceeding capacity of 13 persons & thus, it will be able to avail ITC on the same.
Ü Yes, answer will differ in second case. If seating capacity of tempo traveller is 10 persons, then SRS Cars
Pvt. Ltd. cannot avail ITC on the same as ITC is blocked u/s 17(5)(a).

Sec.17(5) (aa)- Vessel and air-craft
CCP 10.03.11.00

Answer the following questions:-
A) A flying school imports an aircraft for use in its training activity and takes ITC of IGST paid on
import. Departmental audit raises an objection that aircrafts fall within the definition of
“conveyance” u/s section 2(34) of CGST Act and that ITC is not allowed on conveyances. Offer
your comments.

B) Mr. A has two branches, one in Mumbai (MH) and another in Goa. Mr. A purchased a vessel for
transportation of goods between two branches as a cheapest source for transportation. Whether
Mr. A is eligible for Input Tax Credit of tax paid on such vessel?

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