Maharashtra authority of advance ruling (AAR) mentioned that the ITC is available on the GST furnished beneath the RCM on the hiring of the buses for transportation of employees.
In context to the input credit on the rent for the cab service, the petitioner Maanicare System India Private Limited is furnishing the services to the customers indirectly the service charges accumulated through it depends on the percentage of the salary liable to pay to the employees when the employee reaches late his or her salary would be deducted as per that and the applicable service charge is to be diminished.
The applicant is filing the RCM @12% on the bus service claimed through it having the capacity exceeding 13 seating and are subject to apply for claiming the input credit of that. The applicant has sought the advance ruling for the problem of whether the applicant (Maanicare System India Private Limited) is qualified for the ITC on furnished GST beneath the Reverse Charge Mechanism @ 5% for the hiring of buses for transportation of employees.
The two judges Rajiv Mango and T.R.Ramnani secure that Section 17 (5) had clearly debarred Input Tax Credit on motor vehicles or conveyances utilized in the transport of passengers till the revision date 01.02.2019. ITC permitted on leasing, renting, or hiring of motor vehicles, for transportation of persons, containing authorized seating capacity exceeding 13 persons (along with the driver).
In the quicker case, the bus service claimed by the applicant is 49 seater that exceeds 13 seaters.
As per that this does not come beneath the block credit as given beneath section 17(5) of CGST Act 2017 and, hence in the instant case as the petitioner uses the services of renting of the motor vehicle for the business. For applicants, ITC is not blocked beneath referred Section 17(5) of CGST Act 2017. Hence the applicant is qualified for the Input tax credit effected from the date 01/02/2019 only, as per the above legal provisions.
