Indirect Tax Laws (GST & Customs)MCQQuestion 5840 of 504
All Questions

Which of the following Input Tax Credits (ITC) is ELIGIBLE to be availed by Zeta Ltd., a manufacturing company, under Section 17(5) of the CGST Act, 2017?

Select Your Answer (Keyboard: A, B, C, D)
For any discrepancies in this question, email contact@cadada.in

Correct Answer

✅ Option D — ITC on general insurance policy taken for motor vehicles with seating capacity of 25 persons used for employee transportation

All Options:

  • AITC on motor vehicles with seating capacity of 7 persons used exclusively by company directors for official travel
  • BITC on outdoor catering services provided during annual corporate conference
  • CITC on goods stolen from the central warehouse during transit
  • DITC on general insurance policy taken for motor vehicles with seating capacity of 25 persons used for employee transportation ✓

Detailed Solution & Explanation

Analysis under Section 17(5) of the CGST Act, 2017:
1. **Motor vehicles with seating capacity ≤13\displaystyle ≤\displaystyle \le 13**: ITC is blocked under Section 17(5)(a), along with related insurance/repairs under Section 17(5)(ab). Option A is blocked.
2. **Outdoor catering**: Blocked under Section 17(5)(b)(i) unless used for outward taxable supply of the same category or statutory obligation. Option B is blocked.
3. **Goods stolen/lost/destroyed**: Explicitly blocked under Section 17(5)(h). Option C is blocked.
4. **Vehicles with seating capacity > 13 persons**: Specifically excluded from the block of Section 17(5)(a). Consequently, general insurance on such vehicles is fully eligible under Section 17(5)(ab).
Therefore, **Option D** is the correct answer.

More Questions from Indirect Tax Laws (GST & Customs)

Alpha Ltd., a registered person in Maharashtra, supplies goods to its distinct person Beta Ltd. in Gujarat without consideration. Beta Ltd. is eligible for full Input Tax Credit (ITC). The open market value of the goods is ₹5,00,000, and the cost of production is ₹4,00,000. Alpha Ltd. declares a value of ₹3,50,000 in the tax invoice. What is the value of supply under Rule 28 of the CGST Rules, 2017?

Delta Consultants completed a management consultancy assignment on 15th July. The invoice was issued on 28th August. Payment was credited to Delta Consultants' bank account on 20th August, though entered in the books of account on 22nd August. What is the Time of Supply under Section 13(2) of the CGST Act, 2017?

Zenith Marketing Ltd., located in Mumbai, acts as an intermediary / broker connecting foreign software buyers located in London with software developers in Bengaluru. For arranging the supply, Zenith receives a 10% commission in convertible foreign exchange from the London client. What is the Place of Supply and GST liability for Zenith Marketing Ltd.?

Under Rule 89(5) of the CGST Rules, 2017, for computing the maximum refund amount under the Inverted Duty Structure, which of the following Input Tax Credits is included in 'Net ITC'?

An importer imported machinery from Germany with FOB price of €1,00,000. In addition, the importer paid €5,000 to an independent buying agent in Germany for representing him abroad, and €10,000 to the German seller as engineering and design charges incurred in Germany necessary for production. Ocean freight was €8,000 and actual insurance was €1,200. What is the Custom Assessable Value if the exchange rate notified by CBIC is 1 € = ₹90?

Under Section 74 of the Customs Act, 1962, what percentage of import duty is granted as Duty Drawback if imported goods are re-exported without being put into use in India?

Ready to Master Indirect Tax Laws (GST & Customs)?

Practice all 504 questions with instant feedback, earn XP, track your streaks, and ace your CA Final exam.

Start Practicing — It's Free