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Applicant is not eligible for Input Tax Credit on Demo vehicles purchased for furtherance of business, in view of barring provisions of clause (a) of sub-section (5) of Section 17 of GST Act. 2017, as they are not covered by any of the exceptions given in clause (A), (B) or (C) of Sec. 17(5)(a).

Input tax credit— In the instant case, applicant is an authorized dealer of KIA for sales & services of their motor vehicles. Applicant purchases demo vehicles from the supplier against tax invoices after paying tax, and capitalizes the said demo vehicles in his books of accounts. According to the Applicant, Demo Vehicles are used for furtherance of business and are used for imparting training about the features of the vehicle and training on driving such vehicles to the prospective buyer. and the same are used for test drive of the similar vehicle model which will generate taxable revenue and help the applicant in furtherance of their business We are tilling GST Advance ruling seeking “Whether Input tax credit on the Motor vehicle purchased for demo purpose can be availed”. Held that— it is ruled that the Applicant is not eligible for Input Fax Credit on Demo vehicles purchased for furtherance of business, in view of barring provisions of clause (a) of sub-section (5) of Section 17 of GST Act. 2017, as they are not covered by any of the exceptions given in clause (A), (B) or (C) of Sec. 17(5)(a).