No Input Tax Credit of repair, insurance and servicing of motor vehicle w.e.f 1st Feb 2019

Govt issued Notificatoon No 2/2019-CT dated 29.01.2019 whereby specific provisions of CGST (Amendment) Act 2018 made applicable w.e.f 01st Feb 2019 and accordingly Input tax credit of following services relatable to motor vehicle shall not be available:-

(a) general insurance, 

(b) servicing, 

(c). repair and maintenance

*Cases where ITC on  motor vehicle repairing/ insurance services is  available even after amendment*

1. Motor Vehicle for  transportation of persons having approved seating capacity of  more than 13 persons. ( e.g. A Bus)

2. Motor Vehicle for transportation of goods.  ( e.g. A  Truck)

3. Motor Vehicle used for making  following taxable supplies, namely :-

(A) further supply of such motor vehicles ( e.g. In case of a  Car Dealer)

(B) transportation of passengers (( e.g. In case of a Taxi Service Provider)

(C) imparting training on driving such motor vehicles ( e.g. In case of a Driving School)

4. Services received by a taxable person engaged—

(I) in the manufacture of such motor vehicles

(II) in the supply of general insurance services in respect of such motor vehicles insured by him;

*Thus in all other cases apart from above 4 cases (though in 4 cases it was available prior to amendment also), Input Tax Credit in respect of repairs/ insurance of motor vehicle is not available now on and after 01.02.2019*

Consequences of Not Filling of ITR before 31/03/2018

Last date for filling of the  Income Tax returns of Financial Year 2015-16, and 2016-17 was 31st march 2018. Now we will see what may be the consequences if one failed to file ITR before 31st March 2018.

1) PENALTY U/s 271F :- If person fails to file return before end of the relevant assesmnet year then the assessing office may levy penalty of  RS 5000/-

2) Interest u/s 234A :- Interest u/s 234A an simple interest of 1% is levied till the payment of taxes

3)Best judgement assessment u/s 144 : if return is not filled under Sections 139(1), 139(4) or  139 (5) or in response to section 142(1)

4) Prosecution for not filling return of income :  If the return of income is not filled then we may be prosecuted under section 276CC (3 month to 7 years)