RTG Ltd., a manufacturing company, purchases cars (seating capacity 5 persons including driver) for official use of its employees. ITC is __________.

CA Intermediate · Taxation · MTP · September 2026
RTG Ltd., a manufacturing company, purchases cars (seating capacity 5 persons including driver) for official use of its employees. ITC is __________.
(A) (a) allowed as cars are used for business purposes.
(B) (b) blocked since ITC on motor vehicles for transportation of persons with seating capacity upto 13 persons (including the driver) is blocked.
(C) (c) allowed only if cars are used within factory premises.
(D) (d) allowed if depreciation under the Income-tax Act is not claimed.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

(b) blocked since ITC on motor vehicles for transportation of persons with seating capacity upto 13 persons (including the driver) is blocked.

Topics: Paper 3B: Goods and Services Tax, Paper 3A: Income Tax Laws

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