ITC Allowed on Demo Vehicles as per CBIC Circular Dated 10.09.2024

 ITC Allowed on Demo Vehicles as per CBIC Circular Dated 10.09.2024

Issue: Whether the assessee is entitled to Input Tax Credit (ITC) on demo vehicles in light of a recent circular issued by the Central Board of Indirect Taxes and Customs (CBIC).

Facts:

• The assessee sought ITC on demo vehicles.
• Subsequent to the impugned order, the CBIC GST Policy Wing issued a circular dated 10.09.2024, clarifying the availability of ITC for demo vehicles.

Decision:

• The court held that the circular dated 10.09.2024 prevails over the impugned order.
• The assessee is entitled to the benefit of ITC on demo vehicles as per the terms of the said circular.
• With the issuance of the clarifying circular, nothing remained for consideration.
• The petition was disposed of.

Key Takeaways:

• This case highlights the importance of CBIC circulars in clarifying GST issues and their binding nature.
• When a circular clarifies a legal position, it takes precedence over previous orders or interpretations.
• Assessees are entitled to claim benefits as per the latest circulars issued by the CBIC.
• This decision provides clarity on the eligibility of ITC on demo vehicles, ensuring uniformity in tax treatment.
• The courts will uphold the most recent circulars issued by the CBIC, which is the governing body for GST policy.