Circular No. 262/08/2026
Date: October 26, 2026
Subject: Clarification on Input Tax Credit admissibility to authorised agents appointed by manufacturers for sale of motor vehicles, pursuant to the circular No. 231/25/2024-GST dated 10.09.2024
Description:
Para 4.6 of Circular No. 231/25/2024-GST, which stated that input tax credit on demo vehicles was blocked for a dealer acting only as agent of the vehicle manufacturer, is withdrawn.
It is clarified that input tax credit on demo vehicles is not blocked under section 17(5)(a) of the CGST Act for a dealer in the dealer-agency model, where the manufacturer sells vehicles directly to customers.
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