2026-VIL-55-AAR
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SGST Advance Ruling Authority

GST – Karnataka AAR - Buy and sale of used motor vehicles, Eligibility to avail Input Tax Credit on inward supplies other than purchase of used motor vehicles - The applicant, a dealer engaged in the business of buying and selling of used motor vehicles, entitled to ITC on direct and indirect expenses (other than vehicle purchase) incurred in the business of selling used motor vehicles while availing benefits under Notification No. 8/2018-Central Tax (Rate) dated 25.01.2018, as amended – HELD - The restriction on availing ITC under Notification No. 08/2018-CGST (Rate) applies only to the ITC on the used motor vehicles themselves and does not extend to ITC on any other inputs or input services used in the course or furtherance of business. The expression "such goods" in the notification refers only to the used motor vehicles listed therein, and not to any other goods or input services - There is no restriction under Section 16 or Section 17(5) of the CGST Act, 2017 on claiming ITC on the other input services and capital goods used by the applicant. The expenses incurred by the applicant on refurbishment, marketing, professional fees, administrative overheads etc. are essential for the smooth functioning of the used car business and directly linked to the enhancement of the sale value of the vehicles. Accordingly, the applicant is eligible to avail ITC on these inward supplies, subject to fulfilment of the conditions prescribed under the CGST Act and Rules – Ordered accordingly
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