No ITC on Purchase of Cash-Carrying Vans: GST Appellate Authority

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.

Read Also: Free Supply of Goods Under Goods and Services Tax: Rules and Provisions

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.”

Atul Mittal

Atul is a professional content writer with specialisation in business and marketing content. I have been writing tax articles and news for about two years now and have good experience in GST and income tax domains.

Recent Posts

No GST Returns Will Be Accepted If Filed More Than 3 Years Past Their Due Date

An advisory has been released by the Goods and Services Tax Network (GSTN) which notifies…

10 hours ago

Delhi HC: Two Judgment Orders Against One SCN Cannot Be Accepted for the Same Period

It was cited by the Delhi HC that the two adjudication orders against one SCN…

12 hours ago

CBDT Allows Electronic Filing of Forms 3CEDA and 3C-O Via Notification No. 5/2024

The Central Board of Direct Taxes (CBDT) in an update for the taxpayers via the…

13 hours ago

October 2024 Records the 2nd Highest GST Collection, Driven by Domestic Sales

In October, Gross GST collection surged to 9% to Rs 1.87 lakh crore, the second…

15 hours ago

UP AAR: GST Will Be Levied on the Installation of Electricity Distribution Systems by DISCOMs

Goods and Services Tax (GST) is to get paid on the procurement of materials and…

2 days ago

Bombay HC Quashes Rejection Order for Voluntary GST Cancellation Due to Lack of Stated Reasons

The Bombay High Court carried that as the revocation orders for the registration cancellation on…

3 days ago