Question

Can we book GST input on car insurance?

Answer

Section 17(5)(a) of CGST Act, restrict availment of ITC in respect of motor vehicle and other conveyance. But ITC is available when the same is used for further supply of motor vehicle, transportation of passenger, imparting training e.t.c and when used for transportation of goods.

Section 17(5)(a) is reproduced below:-

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

(ii) for transportation of goods;
If you are doing any business specified in above exception then you can take the credit on Car insurance.  (Reply dt.20/10/2018)