In a ruling made recently, the Maharashtra Appellate Authority for Advance Ruling for Goods and Services Tax (AAAR-GST) has decided that Input Tax Credit (ITC) is not available to CMS Info Systems on purchase of motor vehicles for the sole purpose of carrying cash to be used by cash management companies and supplied as scrap thereafter.
According to the ruling, ‘money’ is not treated as ‘goods’ for the GST purpose. “If ‘money’ is not covered as ‘goods’ in the definition of ‘goods’ under CGST Act, then it is not ‘goods’ for everyone and it cannot be said that it is not ‘goods’ for general perception and it is ‘goods’ for the appellant (CMS),” said the AAAR.
The Advance Ruling Authority (AAR) was approached earlier with questions regarding the GST applicability to the vehicles used for carrying cash and the ITC availability for purchases of these vehicles. While the AAR has already ruled that supply of cash-carrying vehicles as scrap after usage will be considered a ‘supply’ for the goods & service tax purpose and such supplies would attract GST, the members of AAR could not reach a common conclusion in the matter of the availability of input credit for the purchase of such vehicles. Therefore, the case was referred to the Appellate Authority (AAAR).
As per the GST law, ITC of tax paid on the purchase of motor vehicles used for transportation of eligible goods is available. However, there is no ITC on motor vehicles that are used for carrying cash for any other than numismatic purposes. The company, which filed the original motion, argued that they should lawfully get ITC of the GST paid on the purchase price of the standard motor vehicle and also of the GST paid on the vehicle modification to make it suitable for cash-carrying purposes.
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The Appellate Authority clarified, “the very first line of the definition, i.e., ‘goods’ means every kind of movable property other than money/ clearly excludes money from the purview of goods under the GST law.” However, any money that is transported for numismatic purposes is an exception. The cash and bullion, except for numismatic value, carried by cash-carrying vans will be therefore treated as money and not goods for the GST purpose.
Even the GST Council had decided the same thing in its meeting on July 21. The AAAR added that GST Council’s recommendations also support “our finding above that money being transported by the Appellant in the cash carry van is certainly not goods.”
