GST Input Tax Credit on Fuel for Goods Transport Agencies
Goods Transport Agencies paying GST under forward charge can claim input tax credit on fuel used for goods carriages.
- Ruling
- GUJ/GAAR/R/2025/55 dated 24.11.2025
- Dated
- 24 Nov 2025
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Godavari Logistics asked if they could claim input tax credit on bio-diesel.
- The authority confirmed GTAs can claim credit on fuel for goods vehicles.
- Section 17(5) restrictions on motor vehicles do not apply to goods carriages.
In short
The Gujarat Authority for Advance Ruling (GAAR) clarified whether a Goods Transport Agency (GTA) can claim input tax credit (ITC) on fuel when paying GST under the forward charge mechanism. The company asked if the restriction on claiming tax credits for motor vehicles prevents them from claiming credit on the bio-diesel used in their trucks.
What has changed
How it worked before
Many businesses were uncertain if the general restriction on claiming input tax credit for motor vehicles also applied to the fuel used in goods transport vehicles.
What has changed
The authority ruled that the restriction on input tax credit for motor vehicles under Section 17(5) of the CGST Act does not apply to goods carriages. This means GTAs paying GST under the forward charge mechanism can now claim credit for the fuel used in their business operations.
Who this affects
Goods Transport Agencies (GTAs) that pay GST under the forward charge mechanism.
An example
A transport company in Maharashtra operates a fleet of trucks and pays GST under the forward charge mechanism. They want to know if they can claim input tax credit on the diesel they buy for these trucks. Based on this ruling, they are likely eligible to claim that credit because their vehicles are used for transporting goods, not people.
What you should do
If you are a GTA, you may now claim input tax credit on fuel used for your goods vehicles, provided you follow all procedural rules. Remember that this ruling only applies to the company that asked; it is not a law that automatically applies to your business. Consult your tax advisor to see if your specific operations meet the requirements.
If you do nothing
If you assume this ruling applies to you and claim credits you are not entitled to, you risk a tax audit and potential penalties. A tax officer may disagree with your interpretation, leading to a demand for the tax amount plus interest. Always verify your specific eligibility with a professional before changing your tax filing practices.
The terms explained
- Goods Transport Agency (GTA)
- A business that provides services related to the transport of goods by road and issues a consignment note.
- Forward Charge Mechanism
- A system where the supplier of a service is responsible for collecting and paying the GST to the government.
- Input Tax Credit (ITC)
- The tax a business pays on its purchases that it can use to reduce the tax it owes on its own sales.
The ruling in detail
Authority for Advance Ruling
Amitkumar Maheshbhai Gulwani (Trade Name: M/s Godavari Logistics)
GUJ/GAAR/R/2025/55 dated 24.11.2025 · Gujarat
Questions before the authority
- Whether the applicant can pay GST @ 12% under forward charge on GTA services under Notification No. 11/2017-Central Tax (R) dated 22.06.2017, as amended, read with Notification No. 13/2017-Central tax (R) dtd. 28.06.2017, as amended, and claim full ITC including on bio-diesel fuel.
Facts
The applicant is a Goods Transport Agency (GTA) providing transportation of goods by road. They have opted to pay GST under the forward charge mechanism and wish to claim Input Tax Credit (ITC) on bio-diesel fuel used in their trucks for providing these taxable services. The applicant sought a ruling on their eligibility to claim this ITC while discharging GST at the applicable forward charge rates.
Ruling
| Question | What the authority ruled |
|---|---|
| Eligibility to pay GST under forward charge and claim ITC on bio-diesel | Yes, the applicant can pay GST @ 12% (18% w.e.f. 22.09.2025) under forward charge and claim full ITC on bio-diesel. Subject to fulfilling conditions in Section 16 and Section 17 of the CGST Act, 2017 and Notification No. 11/2017-CT(R). |
The Authority ruled that the applicant is eligible to pay GST under the forward charge mechanism and claim full ITC on bio-diesel fuel used in their operations. This eligibility is contingent upon the applicant fulfilling all other conditions prescribed under the CGST Act and the relevant notifications. The ruling confirms that the restriction on ITC for motor vehicles under Section 17(5) does not apply to goods carriage vehicles.
Reasoning
The Authority reasoned that the applicant is a registered person using the fuel in the course and furtherance of their business, satisfying the requirements of Section 16(1) of the CGST Act. It specifically noted that the **blockage of credit under Section 17(5)** is restricted to motor vehicles for the transport of persons and does not extend to goods carriage vehicles. Consequently, there is no legal bar preventing a GTA from availing ITC on fuel inputs used for taxable transportation services. The ruling emphasizes that the applicant must strictly adhere to the procedural conditions for exercising the forward charge option.
Provisions relied on
- Section 2(zc) of the CGST Act, 2017
- Section 16 of the CGST Act, 2017
- Section 17(5) of the CGST Act, 2017
- Notification No. 11/2017-Central Tax (R) dated 22.06.2017
- Notification No. 13/2017-Central Tax (R) dated 28.06.2017
For the practitioner
This ruling provides **favorable clarification for GTAs** seeking to claim ITC on fuel used in goods carriages. It confirms that the Section 17(5) restriction on motor vehicles does not apply to goods transport vehicles, allowing for the **full utilization of ITC on fuel** when the forward charge option is exercised. Practitioners should note that this remains subject to the applicant's strict compliance with the procedural requirements for opting into the forward charge mechanism.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/55_godavari_logistics.pdf
Legibility of the scan, as read: high.
Prepared 14-10-2026.
About Patron Accounting LLP
Patron Accounting LLP is a CA and CS-led accounting and compliance firm that has been working with businesses across India since 2019. We handle the work that keeps a company correct with every department it answers to: day-to-day bookkeeping and accounting, GST registration and returns, income tax filing and assessments, TDS, payroll and PF/ESI, company and LLP incorporation, ROC and MCA compliance, statutory and internal audit, physical stock and inventory audits, trademark and other registrations, and the certificates and reports that banks, buyers and regulators ask for.
Our clients range from a first proprietorship registering for GST to established companies running operations across several states. Much of our work is exactly this: reading what a department has published and telling a business, in plain terms, whether it changes anything for them.
We operate from five offices and serve clients across the rest of India remotely:
- Pune (HQ): RTC Silver, B4-708, Sai Satyam Park, Wagholi, Pune, Maharashtra 412207
- Mumbai: 104, Rajshila Building, 597 J.S.S. Road, Marine Lines, Mumbai 400002
- Delhi: 3rd Floor, B-6/154-155, Sector 5, Rohini, Delhi 110085
- Gurugram: Pioneer Urban Square, B109, Golf Course Ext Road, Sector 62, Gurugram 122098
- Ahmedabad: Phoenix Tower, 1107, near Commerce Six Road, Drive In Road, Navrangpura, Ahmedabad, Gujarat 380009
If anything on this page affects you and you would like somebody to look at your own position, we are glad to help. Call +91 94594 56700, write to sales@patronaccounting.com, or visit patronaccounting.com. The first conversation costs nothing.