Page 9 - Ch_10 ITC

Answer:
Legal Provision:- As per section 17(5)(aa) of CGST Act, ITC is blocked on vessel & aircraft except when

they are used:-
i) for making following taxable supplies:-
a) Further supply of such vessels or aircraft or
b) Transportation of passengers or

c) Imparting training on navigating such vessel or
d) Imparting training on flying such aircraft
ii) for transportation of Goods.
Discussion & Conclusion:-

A) In the given case, Aircraft is used for imparting training on flying such aircraft & hence, ITC will be allowed
on such aircraft. Therefore, the input tax credit is correctly taken by flying school.
B) In the given case, Vessel is used for transportation of Goods by Mr. A & hence, he is eligible for ITC of tax
paid purchase of such vessel.

Sec 17(5)(ab):- Services related to items in 17(5)(a) & 17(5)(aa)
CCP 10.03.12.00

Mr. Veer paid tax on repairs, maintenance and insurance of Motor Vehicles used for transportation of 6
employees for the purpose of business. Is this eligible for ITC?
What will be your answer, if Mr. Veer paid tax on repairs and maintenance of tempos used to transport
finished goods?
Answer:

Legal Provision:-
Ü As per section 17(5)(ab) of CGST Act, input tax credit is blocked on general insurance, servicing, repair &
maintenance of those motor vehicles on which input tax credit is blocked u/s 17(5)(a).
Discussion & Conclusion for 1st Case:-

Ü In given case, motor vehicles are used for transportation of 6 employees i.e. the seating capacity is not more
than 13 persons & hence, ITC on such motor vehicles is blocked u/s 17(5)(a).
Ü ITC on repairs, maintenance & insurance of these Motor Vehicles is also blocked u/s 17(5)(ab).
Ü Therefore, Mr. Veer is not eligible for ITC.
Discussion & Conclusion for 2nd Case:-

Ü ITC on motor vehicles used for transportation of goods is allowed u/s 17(5)(a).
Ü Further, ITC is allowed on repair & maintenance relating to motor vehicles, ITC on which is allowed.
Ü Therefore, repairs and maintenance of tempos used by Mr. Veer for to transport finished goods is eligible for

ITC.

CCP 10.03.13.00
ABC Ltd is a manufacturing co. is registered in village and is providing food and beverage to its
employees. The company avail outdoor catering services of Mr. X for providing such meals to its

employee. Examine whether ABC ltd. can avail the ITC on such outdoor catering service. These services
are provided to the employees under factory act requirements.
Answer:

Ü As per section 17(5)(b), ITC on supply of inter alia food and beverages and outdoor catering is blocked.

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