Page 43 - GSTL_21st May 2020_Vol 36_Part 3

2020 ] SUPPLY OF DEMO CARS — RATE OF GST & ITC AVAILABILITY J69

Diesel Vehicles with more 28% 18%
than 1500cc engine capacity &
4000mm length (HSN 8703)
SUVs (including utility vehi- 28% 18%
cles) with more than 1500cc
engine capacity (HSN 8703)
Vehicles other than those men- 28%/18%/12% 12%
tioned above, including other *
vehicles under Chapter 87

(2.2) Conditions for claiming such rates & exemptions
(2.2.1) Where depreciation claimed under Income-tax, margin shall be
calculated as consideration received (-) depreciated value of
goods as on date of supply. Here, it is important to note, that
although Income Tax required depreciation to be calculated on
the asset block, the rate is required to be applied for the specific
motor vehicle, upto the date of supply.

(2.2.2) The credits under GST or erstwhile laws have not been claimed.
(GST, VAT, ED, ST)
(2.3) Now based on above extract of the notification Mr. Y can apply
concessional rate of tax as defined in the above notification effec-
tive from 25th January, 2018 only if no ITC has been claimed by
him under GST law or erstwhile laws and no depreciation is
claimed under the Income-tax Act, 1961.
(2.4) Two instances can be drawn from the instant notification and
facts of the case :
(2.4.1) If Mr. Y had claimed ITC of the said motor vehicle : In the first
case, Mr. Y cannot apply the concessional rate of tax under
above notification, but he would be allowed to take the ITC of
the said purchase, which has also been affirmed in two advance
rulings: (Although advance ruling is applicable on the applicant
only who sought to have applied for it but the grounds of the
same can be a basis for applying in cases with similar facts)

(a) “Authority for Advance Rulings, Maharashtra in matters of
Chowgule Industries (P) Ltd., Order No. GST-ARA-18/2019-
20/B-121, dated 26 December, 2019”
(b) “Authority for Advance Rulings, Kerala in matters of A.M.
Motors., Order No. KER(10) of 2018 dated 26 September,
2018”
“Wherein it was held in both case that “Applicant, an author-
ized dealer of motor vehicles, is entitled to avail input tax cred-
it charged on inward supply of motor vehicle which are used
for demonstration purpose in course of business of supply of
GST LAW TIMES  21st May 2020  43