A dealer has purchased car for use in the business.Whether Gst debited in invoice can be claimed as input tax against gst payable on business supplies and whether car depreciation can be claimed on net purchase of car or including gst.

Reply- In respect of motor vehicles used for transportation of persons having approved seating capacity of not more than thirteen persons (including driver) ITC is available only when it is used for further taxable supply of motor vehicles or further taxable supply of service of transportation of Passengers or service of imparting training on driving such motor vehicles. 

ITC will not allow on purchase of Car in terms of section 17(5) of CGST Act.

As per Section 16(3) of CGST Act, where the registered person has claimed Depreciation on the tax component of the cost of capital goods and plant and machinery under the provisions of the Income-tax Act, 1961, the input tax credit on the said tax component shall not be allowed. ITC cannot be claimed on tax paid on that capital goods because GST is debited in Fixed assets account instead of ITC account.

Thus, taxpayer has two options either he can claim it as ITC or add into cost and claim Depreciation.

In your case, as taxpayer is not eligible to claim ITC, hence, depreciation can be claimed on the tax component also.