Section 17 (5) of CGST Act is amended from 1.2.2019. If registered for GST, or required or entitled to be, a GST credit can be claimed for a car expense incurred for a creditable purpose. Input-taxed sales. you van claim itc on repair and maintenance of motor car. In case of a Car Dealer), (B) Transportation of passengers (e.g. expenses that you pay GST or HST on (basic groceries, insurance premiums, mortgage interest, motor vehicle license fees do not qualify) GST/HST paid on the portion of the CCA you claimed on motor vehicles, aircraft, and musical instruments that you did not receive an allowance for. Through CGST Amendment Act 2018, the law on this point has been amended by inserting clause (ab) to Sec. Cars(for income tax purposes) are defined as motor vehicles (including four-wheel drives) designed to carry both: 1. a load less than one tonne 2. fewer than nine passengers. GST is also required to be paid on this. Around $5,500 was spent in fuel, insurance and repairs during the year. Who needs to register for a GST/HST account. 15 October 2019 Dear Sir, Could you please confirm whether we can claim ITC on the motor car repairs & maintenance bill or not. The open-market value at the time of purchase can be found on the vehicle registration card. If the travel was partly private, you can claim only the work-related portion. Motor vehicles used for goods transport remain eligible – No change from earlier Act – only the wordings are simplified: ... Can ITC be claimed on Insurance and repair expenses of car used for business purposes. not business) purposes. A log book will need to be kept for 12 weeks to show the business use of the vehicle, the details of … We are committed to helping startups and small business owners in solving legal compliance related to starting and running their business.Our mission is to offer affordable, quick and automated professional services to clients. Where such wrongly availed ITC has been utilized the interest payable is 24% as per Section 50(3) of the CGST Act. GST/HST on the lease of a specified motor vehicle Generally, when you lease a specified motor vehicle from a business that is a GST/HST registrant, you have to pay the GST/HST on your lease payments. +919 266 466 566      18 D, First Floor, Office No. includes second hand motor vehicles. When an employer pays reasonable motor vehicle allowances to an employee for the reimbursement of the employee's motor vehicle expenses while on the job (see Tax free motor vehicle allowances), an input tax credit can be claimed. Also, this brings us to consult with our tax advisors on treatment of input credit under following categories If the logbook method was used the business use percentage, as calculated over the 12-week logbook period, is the percentage used for claiming input tax credits included in car costs. IN SECTION 17(5)(a)-Blocked credit, credit of only motor vehicle is blocked, not motor vehicle expenses, so in my opinion gst on motor vehicle expenses like car repairing , insurance etc should be allowed. As you are intending to claim the GST on the vehicle you will need to substantiate all your expenses, so all the receipts and logs will need to be accounted for. Purchasing a motor vehicle. 6 Sale of New Vehicles 6.1 For sale of new vehicles, GST is charged on the Selling Price less ARF, COE, RF and Road Tax. The meaning and purport of this new clause is that ITC in respect of services of general insurance, servicing, repair and maintenance related to a motor vehicle is now specifically in the blocked credit category, if such motor vehicle is –, Cases where ITC on motor vehicle repairing/ insurance services is available even after amendment. The motor vehicle must be owned, leased or under a hire-purchase agreement. petrol and parking expenses) of a motor car is not claimable. If you trade a used vehicle for full or partial payment for a lease, the GST/HST treatment depends on if you have to charge tax on the trade-in. At Zebra, this is our preferred method of claiming motor vehicle expenses as it keeps your administration time to a minimum. If you operate your busine… GST/HST Input Tax Credits on Motor Vehicle Allowances Excise Tax Act s. 174. whether it is correct ? Copyright © 2019 eFiling India. Private mileage refers to the mileage made for personal (i.e. Car purchases, leased vehicles and purchasing second-hand, or car parts to you GST-free name, email and... Ask a Query Warrant of Fitness, paying for maintenance, insurance and repairs during the year Report Follow! Available for employees or shareholder-employees to use privately for transportation of passengers ( e.g benefiting a worthwhile purpose! Use privately name, email, and parking expenses ) of a driving School ), ( C Imparting! 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