Question 47: One of my clients is providing rent-A cab services .Sometimes he hire cars from other cab operator.

Kindly guide on followings

1. Which rate will apply (5% or 18%)'

2. Can he take input of gst charged on car hired by him

3. Can he take input of gst charged on purchased car


Answer Please refer to section17(5) the same is as follow

Section 17(5) Notwithstanding anything contained in sub-section (1) of section 16 and subsection (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; o

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

1.Rate of tax is 18%

2.yes credit is available to the service provider if providing same service

3 Yes credit can be availed.(REPLY dt. 23/1/2018)