M/s. INDIAN COTTON SOLUTIONS.COM PRIVATE LIMITED, (hereinafter also referred as applicant), having GSTIN : 37AADC17003 DIZZ are engaged in supply of service by providing Mobile Laboratory Services, to  test the quality of Cotton.

2. The applicant has filed an application in FORM GST ARA-01, dated 20-3-2018, for seeking advance ruling on ‘Admissibility of input tax credit of tax paid or deemed to have been paid’. The question is as follows.

“Whether they can utilize/ refund the ITC which is readily available in GST Portal, for the vehicles purchased by them for the purpose of their core business activity?”

3.  On verification of basic information of the applicant, it is observed that the applicant falls under State jurisdiction, i.e. Brodipet Circle, of Narasraopet Division (as per the bifurcation lists of taxpayers between the Centre and State in the prescribed manner), accordingly, the application has been forwarded to the jurisdictional officers and also a copy marked to the Central Tax authorities to offer their remarks as per the Section 98(1) of CGST/APGST Act, 2017, and requested for the information.

4.  In response to this communication, the concerned jurisdictional officer, offered their remarks, and stated that there were no proceedings pending relating to the applicant, and no proceedings were passed on the issue, for which the advance ruling sought by the applicant.

5.  A personal hearing is called for on 4-4-2018, to hear from the applicant, Sri M. Gopi Krishna, authorized representative had attended on behalf of the applicant and submitted the facts of case. It is submitted that the firm purchased five vehicles to use as mobile cotton labs, for the purpose of testing of quality of cotton. It is argued that the business itself is testing and the lab (launched on vehicles) are to be considered as prime business components, without  which there cannot be any supply of services. Hence to be considered as eligible for ITC.

6.  We have gone through the application filed by the applicant, and after careful examination of the said issue, this authority is of the opinion, that the Input Tax Credit on the vehicles purchased by the applicant for the purpose of  their business will fall under Section 17(5), and given the ruling accordingly. The text of Section 17(5) is as under.

“Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely :-

(a) motor vehicles and other conveyances except when they are used

(i) for making the following taxable supplies, namely :-

(A)  further supply of such vehicles or conveyances ; or

(B)  transportation of passengers; or

(C)  imparting training on driving, flying, navigating such vehicles or conveyances;

(ii) for transportation of goods”

RULING

7.  It is clear from the plain reading of the section, that the goods referred by the applicant do not fall under the exceptions referred in Section 17(5) of CGST / APGST Act, 2017. Hence the applicant is not entitled for claim of ITC.