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Sec 17(5) blocks ITC on certain supplies even if used in business. Which is BLOCKED?
AMotor vehicle for transport of passengers (seating capacity 13 or less) — for personal use
BMotor vehicle for transportation of goods
CMotor vehicle used by a driving school for imparting training
DTipper trucks for excavation
Answer & Solution
Correct answer: A. Motor vehicle for transport of passengers (seating capacity 13 or less) — for personal use
1. Sec 17(5)(a) blocks ITC on motor vehicles for transportation of persons having approved seating capacity ≤13 persons (incl. driver), except when used for:
2. (i) further supply of such vehicles, (ii) transportation of passengers (taxi business), or (iii) imparting driving training.
3. Goods carriers (any seating capacity) and earth-moving equipment (tipper) are NOT blocked.
_Source: ICAI BoS CA Final Paper 8, Ch 6 "Input Tax Credit", §Sec 17(5)(a)_
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