The proposed GST changes are not in force. A 5 October 2026 Business Standard report says proposals to widen input tax credit (ITC) on some vehicles and change interstate vehicle checks were expected to come before the GST Council. The report does not establish that the Council approved them, and no official 2026 confirmation is established here.
Can businesses claim GST ITC on cars used for work?
Under the current legal baseline, a business cannot claim ITC on a passenger motor vehicle with approved seating capacity of not more than 13 people, including the driver, unless it falls within specified exceptions. Section 17(5)(a) of the CGST Act sets out exceptions for vehicles used to make taxable supplies by further supply of those vehicles, passenger transportation, or driving instruction. The GST Council’s material for its 54th meeting reproduces the statutory provision.
That rule is the context for the reported proposal; it is not evidence that a broader business-use deduction is already available. The report describes a possible change, not an entitlement businesses can rely on today.
What vehicle ITC changes did the report describe?
Business Standard reported that one proposal would permit ITC on motor vehicles seating up to 13 people, including the driver. It also said credit could extend to insurance, servicing, repairs, and maintenance for those vehicles. These details were attributed to unnamed sources in the report, not to final legislation or an official Council decision.
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The report also mentioned vehicle leasing and rentals, electric vehicles, demonstration and second-hand vehicles, and goods delivery through ecommerce platforms. It did not establish final eligibility conditions for these categories. Until a decision and its legal wording are published, businesses should not treat any of these reported possibilities as settled policy.
What could change for interstate vehicle checks?
The report described a possible approach in which a vehicle would be stopped for an interstate check when specific information called for one, with prior authorization from a senior officer. It did not provide final rule language or establish that this approach had been adopted.
Earlier GST Council material from the 29th meeting discusses risk-based checks, senior-level authorization, and reporting checks. That historical material provides context only; it does not confirm the 2026 report’s proposal or show that it is now in force. See the 29th GST Council meeting material.
Has the GST Council approved the proposals?
Approval is not established by the available sources. Business Standard’s 5 October 2026 report describes proposals expected to come before the Council, and says they were not final. No official 2026 Council material confirming adoption is established here.
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Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What businesses should check before claiming ITC
- Apply the current Section 17(5)(a) rule and its specified exceptions to passenger vehicles.
- Do not claim vehicle-related ITC on the assumption that the reported proposal has taken effect.
- For any eventual change, check the published legal text for covered vehicle and use categories, treatment of insurance and upkeep costs, approval status, and commencement date.
- For interstate checks, look for the final rule on when a stop is permitted, who must authorize it, and any reporting requirements.
These checks matter because the report does not supply final text or an effective date. The statutory baseline cited above is the available basis for the current-law context.
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