Case Details: Toyota Mobility Solution and Services India (P.) Ltd., In re [2026] 185 taxmann.com 609 (AAR-KARNATAKA)
Judiciary and Counsel Details
- SivaKumar S Itagi & Kalyanam Rajesh Rama Rao, Member
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R.K Suchindra, CA for the Respondent.
Facts of the Case
The applicant was a GST-registered dealer in old and used passenger motor vehicles operating under the margin scheme. It purchased used vehicles, undertook minor refurbishment, and sold or transferred them through branches after discharging GST on margin. It incurred various inward supplies including refurbishment services, marketing, professional services, housekeeping/security, rent, software, staffing, administrative expenses, and capital goods such as laptops and furniture, and sought clarity on eligibility of Input Tax Credit (ITC) on such inputs. The issue arose whether ITC was barred under the margin scheme restrictions applicable to used motor vehicles. The matter was accordingly placed before the Authority for Advance Ruling (AAR).
AAR Held
The AAR held that the restriction on ITC under the margin scheme applied only to old and used motor vehicles themselves and not to ancillary inputs, input services, or capital goods used in business operations. It held that the expression ‘such goods’ in the Notification No. 08/2018-CGST (Rate) dated 25-01-2018 referred exclusively to the vehicles covered under the scheme and did not extend to refurbishment, administrative, or operational inputs. It further held that the general scheme of Section 16 read with Section 17 of the CGST Act permits ITC on inputs used in the course or furtherance of business unless specifically blocked. Accordingly, none of the blocked credit provisions were attracted in respect of the inward supplies in question. The applicant was therefore held eligible to avail ITC on listed services and capital goods, subject to statutory conditions.
List of Cases Referred to
- Sri Jeyaram Educational Trust v. A.G. Syed Mohideen 2010 CIJ 273 SC (1) (para 7.5)
- Government of Andhra Pradesh v. Road Rollers Owners Welfare Association (2004) 6 SCC 210 (para 7.7)
- Swedish Match AB v. SEBI AIR 2004 SC 4219 (para 7.7)
- Gurudevantt VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980 (para 7.7)
- Royal Drive Pre-Owned Cars LLP, In re [Kerala AAR No. KER/48/2024, dated 14-6-2024] (para 7.9)
- Attica Gold (P.) Ltd., In re [Karnataka AAR No. 40/2022, dated 27-10-2022] (para 7.10).
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