GST Input Credit Available on JCB, Dumpers, Tippers, and similar Vehicles

Position after GST Amendment Act, 2018 (wef 01st Feb 2019)

As per the amended provisions of Blocked Credit [Section 17(5)], only motor vehicles used for transport of passengers, having seating capacity of upto 12, are blocked (excluding some cases).

So all other motor vehicles, like transport trucks, trolleys, small load vehicles like Tata Ace etc, and construction vehicles like JCB, dumpers, tippers…etc, ITC IS NOT BLOCKED ON THESE, without any doubt.

Position before GST Amendment Act, 2018 (Upto 31st Jan 2019)

The GST law never seems to end its surprises. When people are still getting into terms with the provision that as per Section 17(5) (a) of the Central GST Act, Input Tax Credit shall not be available on “motor vehicle”, unless it is used for specified purposes listed therein.(Transport, Training etc.)

Thus, any person who normally purchases a Car or any motor vehicle, even if for business purpose, cannot claim input credit of GST charged on it.

One very important thing which is often overlooked is the definition of the term “Motor Vehicle” under GST. We generally take it to mean that all types of vehicles, as nowadays everything is run by motor. But as per Section 2(76) of the Central GST Act the expression ‘motor vehicle’ shall have the same meaning as assigned to it in Clause (28) of Section 2 of the Motor Vehicle Act, 1988.

Now, when we look at that definition, it does not include the vehicles used as mining equipment, like, tippers, dumpers! Therefore, as per present provisions, the GST charged on purchase of earth moving machinery & vehicles, including dumpers, tippers used for transportation of goods by a business will be allowed as input credit. This is indeed a very important point for mining businesses.

Supporting of the above analysis

The Info discussed here is as per the “FAQ on GST impact on mining sector” released by CBEC, which can be downloaded here

This was also supported in an Advance Ruling in case of PUREWAL STONE CRUSHER dated September 11, 2018, extract of the ruling is as follows –

“…We observe that definition in clause (28) of Section 2 of the Motor Vehicle Act, 1988 is an extensive definition which includes all kinds of mechanically propelled vehicles including a trailer. The scope of the Motor Vehicles Act is to bring into its fold all kinds of moving objects plying on the roads under its ambit so as to provide safety measures and regulate traffic. Therefore, any objects which moves on the road by itself requires registration under the Motor Vehicles Act. Now, When we look at that definition, it does not include the vehicles used as mining equipment, like, tippers, dumpers etc. Therefore, under the provisions of GST law, the GST paid on purchase of “Pokland, JCB, Dumper & Tipper-used for transportation of goods will be allowed as ITC. Our view get support from answer to question 21 of FAQ published in GST. Sectoral Series- Mining and the same is extracted as under:

Question 21: Will GST : charged on purchase of all earth moving machinery including JCB, tippers, dumpers by a mining company be allowed as input credit?

Answer: The provision of Sec. 17(5) (a) of the CGST Act, 2017 restricts credit on motor vehicle for specified purposes listed therein. Further, in terms of the provision of Section 2(76) of the CGST Act, 201 7 the expression ‘motor vehicle’ shall have the same meaning as assigned to it in Clause (28) of Section 2 of the Motor Vehicle Act, 1988, which does not include the mining equipment viz., tippers, dumpers. Thus, as per present provisions, the GST charged or purchase of earth moving machinery including tippers, dumpers used for transportation of goods by a mining company will be allowed as input credit…”

Citation – 2018 (10) TMI 346 – AUTHORITY FOR ADVANCE RULINGS, UTTARAKHAND