GST UPDATE

????Desk of CA. Praveen Sharma Series-584????

?The document provides a clarification on the availability of input tax credit (ITC) for demo vehicles under the GST framework, as per Circular No. 231/25/2024-GST dated 10th September 2024. Key points include:

?Demo Vehicles as Capital Assets : These vehicles are maintained by authorized dealers as per dealership norms for trial runs and demonstrations. After a mandatory period, they may be sold at a written-down value with applicable tax.

Input Tax Credit on Demo Vehicles:

?ITC is allowed on demo vehicles if they are used for making further supplies, such as sales of motor vehicles.

?ITC is blocked if demo vehicles are used for other purposes, such as transportation of staff.

?ITC is allowed even if demo vehicles are capitalized in the dealer's books, provided no depreciation is claimed on the tax component.

CA. Sharma Praveen

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