ITC available to Demo Vehicles: Punjab and Haryana HC Quashes AAAR ruling against BMW

The Punjab and Haryana High Court quashed an AAAR ruling against BMW, allowing input tax credit (ITC) for demo vehicles. The court ruled that demo vehicles used for business purposes are eligible for ITC under the GST law. The case involved BMW’s claim for ITC on demo vehicles used for test drives and promotional activities. The AAAR had previously denied the ITC claim, but the high court overturned the decision, stating that demo vehicles are integral to the business operations and qualify for ITC. The ruling provides clarity on the eligibility of ITC for demo vehicles and supports businesses in claiming tax credits for legitimate business expenses.