{"id":8887,"date":"2026-04-29T17:54:58","date_gmt":"2026-04-29T12:24:58","guid":{"rendered":"https:\/\/www.centaxonline.com\/blog\/?p=8887"},"modified":"2026-04-30T07:55:50","modified_gmt":"2026-04-30T02:25:50","slug":"itc-allowed-on-inputs-under-margin-scheme-for-used-cars-aar","status":"publish","type":"post","link":"https:\/\/www.centaxonline.com\/blog\/itc-allowed-on-inputs-under-margin-scheme-for-used-cars-aar","title":{"rendered":"ITC Allowed on Inputs Under Margin Scheme for Used Cars | AAR"},"content":{"rendered":"<pre><strong>Case Details: <a href=\"https:\/\/www.centaxonline.com\/latest-news-updates\/gst\/101010000000418868\/itc-restriction-under-margin-scheme-applies-only-to-old-vehicles-not-to-inputs-input-services-or-capital-goods-aar\">In re: Toyota Mobility Solution and Services India Pvt. Ltd. (2026) 41 Centax 345 (A.A.R.-GST-Kar.)<\/a><\/strong><\/pre>\n<h2><em>Judiciary and Counsel Details<\/em><\/h2>\n<ul>\n<li><strong>S\/Shri Sivakumar S Itagi<\/strong> &amp; <strong>Kalyanam Rajesh Rama Rao,<\/strong> Member<\/li>\n<li><strong>Shri R.K Suchindra,<\/strong> CA, for the Respondent.<\/li>\n<\/ul>\n<h2><em>Facts of the Case<\/em><\/h2>\n<p>The applicant was a GST-registered dealer engaged in the purchase and sale of old and used passenger motor vehicles. The applicant purchased used vehicles, carried out minor refurbishment, and thereafter sold the vehicles or transferred them to branches. GST was discharged on the margin under Notification No. 08\/2018-CGST (Rate), dated 25-01-2018. In the course of business, the applicant incurred expenditure on inward supplies relating to refurbishment, marketing, professional services, housekeeping and security, rent, office and software services, staffing, administration, and capital goods such as laptops and furniture. The applicant sought a ruling on the eligibility of input tax credit (ITC) in respect of such inward supplies while operating under the margin scheme. The matter was accordingly placed before the Authority for Advance Ruling (AAR).<\/p>\n<h2><em>AAR Held<\/em><\/h2>\n<p>The AAR held that the expression \u2018such goods\u2019 used in the notification referred only to old and used motor vehicles specified in the Table. It was further held that the restriction contained in paragraph 2 of the notification applied only to ITC relating to those old vehicles themselves and not to ancillary inputs, input services, or capital goods used in the business. The Authority also held that the statutory scheme permits ITC on inward supplies used in the course or furtherance of business, subject to satisfaction of prescribed conditions and subject to blocked credit provisions, where applicable. Accordingly, the applicant was held eligible to avail ITC on the listed services and capital goods.<\/p>\n<h2><em>List of Cases Cited<\/em><\/h2>\n<ul>\n<li>Attica Gold (P.) Ltd. \u2014 Karnataka AAR No. 40\/2022, dated 27-10-2022 \u2014 Referred [Para 7.10]<\/li>\n<li>Government of Andhra Pradesh v. Road Rollers Owners Welfare Association \u2014 (2004) 6 SCC 210 \u2014 Referred [Para 7.7]<\/li>\n<li>Gurudevantt VKSSS Maryadit v. State of Maharashtra \u2014 AIR 2001 SC 1980 \u2014 Referred [Para 7.7]<\/li>\n<li>Royal Drive Pre-Owned Cars LLP \u2014 Kerala AAR No. KER\/48\/2024, dated 14-6-2024 \u2014 Referred [Para 7.9]<\/li>\n<li>Sri Jeyaram Educational Trust v. A.G. Syed Mohideen \u2014 2010 CIJ 273 SC (1) \u2014 Referred [Para 7.5]<\/li>\n<li>Swedish Match AB v. SEBI \u2014 AIR 2004 SC 4219 \u2014 Referred [Para 7.7]<\/li>\n<\/ul>\n<h2><em>List of Notifications Cited<\/em><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=Notification%20No.%2008%2F2018-CGST%20(Rate)&amp;itemType=AP\">Notification No. 08\/2018-CGST (Rate)<\/a>, dated 25.01.2018<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=Notification%20No.%2004%2F2025-Central%20Tax%20(Rate)&amp;itemType=AP\">Notification No. 04\/2025-Central Tax (Rate)<\/a>, dated 16.01.2025<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Case Details: In re: Toyota Mobility Solution and Services India Pvt. Ltd.&hellip;<\/p>\n","protected":false},"author":19,"featured_media":8899,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37,60,189],"tags":[],"class_list":["post-8887","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gst","category-news","category-gst-case-chronicles"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>ITC Allowed on Inputs Under Margin Scheme for Used Cars | AAR<\/title>\n<meta name=\"description\" content=\"AAR rules ITC restriction in margin scheme applies only to used vehicles, not to inputs, services or capital goods used in business.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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