Is ITC available on Insurance and repairs & maintenance of Vehicles ?
ITC is taxes paid on inward supply of goods as well as services. It can be availed only after fulfillment of certain basic conditions given u/s 16(2). In general, ITC on repairs and maintenance, general insurance , etc is blocked, i.e not allowed u/s 17(5) on or after 1st February’2019. However, on fulfillment of certain conditions ITC on the same can be allowed.
Motor vehicles/ aircrafts/ vessels on which ITC claim is allowed at the time of purchase, then the same will be also be allowed at the time of repairs and maintaince, general insurance, etc.
For conveyance medium on which ITC is not allowed at the time of purchase, even for them ITC can be availed if the recipient is engaged in:
a) manufacturing of motor vehicles, aircrafts and vessels
b)supply of general insurance services in respect of such conveyance medium
To avail ITC on such conveyance means, the vehicle should be used for transfer of goods. For services transport, either the vehicle should have seating capacity of more than 13 persons or the vehicle should be used for the following purpose:
a) making further supply of motor vehicles, aircraft and vessels (e.g. In case of a Car Dealer), or
b) making taxable supply for transportation of passengers (e.g. In case of a Taxi Service Provider), or
c) making taxable supply for imparting training on driving/ flying/ navigating such vehicle. (e.g. in case of a Driving School)
For better understanding of the concept, flow chart has also been provided:
ITC is taxes paid on inward supply of goods as well as services. It can be availed only after fulfillment of certain basic conditions given u/s 16(2). In general, ITC on repairs and
