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Clarification on Input Tax Credit for Demo Vehicles under GST
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CBIC issued Circular No. 231/25/2024-GST on Sep 10, 2024, providing clarification on the availability of ITC for demo vehicles used by authorized motor vehicle dealers.
Demo vehicles, purchased for trial runs and demonstrations to potential buyers, are considered as capital assets in the dealer's books.
The circular clarifies that ITC is available for demo vehicles if they are used for promoting the sale of similar vehicles, classifying them as being used for "further supply" of such vehicles.
However, if demo vehicles are used for non-sale purposes (e.g., employee transport), ITC will not be available.
ITC is also subject to certain conditions, such as non-claiming of depreciation on the tax component under the Income Tax Act.
Demo vehicles, purchased for trial runs and demonstrations to potential buyers, are considered as capital assets in the dealer's books.
The circular clarifies that ITC is available for demo vehicles if they are used for promoting the sale of similar vehicles, classifying them as being used for "further supply" of such vehicles.
However, if demo vehicles are used for non-sale purposes (e.g., employee transport), ITC will not be available.
ITC is also subject to certain conditions, such as non-claiming of depreciation on the tax component under the Income Tax Act.
Sample Taxupdate Code: 401
Tax Update: Clarification on Input Tax Credit for Demo Vehicles under GST
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without PG logo, PG watermark and without word 'Sample',
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SubscribeBuy this Single Poster for Rs.29 .
PayOnce you make payment, kindly send Tax update as 401 and your email id on whatsapp on
9136667325.
And share on Social Media
You can update Firmname, Logo, Profession, Mobile, Email, Address from Profile.
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Sample Taxupdate Code: 401
Tax Update: Clarification on Input Tax Credit for Demo Vehicles under GST
You need to subscribe to service to start downloading posters
without PG logo, PG watermark and without word 'Sample',
Charges Rs. 1799 per year instead of Rs. 2400/-.
SubscribeBuy this Single Poster for Rs.29 .
PayOnce you make payment, kindly send Tax update as 401 and your email id on whatsapp on
9136667325.
And share on Social Media
You can update Firmname, Logo, Profession, Mobile, Email, Address from Profile.
