AAAR allows input tax credit on purchase/fabrication of cash-carry vans

The Appellate Authority for Advance Ruling (AAAR) has held that Input Tax Credit should be made available for 'cash carry vans' that are used to transport cash. The applicant is involved in cash management, the supply of automated teller machines (ATMs) and transporting cash from the currency chest to various branches of banks. Since the AAR couldn't decide on this advance ruling, they referred the case to the AAAR who held that the company was not eligible for claiming ITC. The applicant then approached the Bombay High Court which ordered the AAAR to revise their order. As per the revised ruling held by the AAAR, the transportation of cash is done through cash carry vans which are generally purchased as raw motor vehicles and fabricated to beef up the security of the vehicle. While GST is paid on the purchase of the motor vehicle and the fabrication process, the ITC for the same is not available. The applicant sought advance rulings on two concerns viz. whether the supply of such motor vehicles as scrap, after its usage, can be treated as supply in the course or furtherance of business and whether such a transaction would attract GST? If so, what would be the rate of GST and/or compensation cess? The second question was whether ITC is available to the company on the purchase of motor vehicles if the answer to the first question is affirmative. In their submission, the company stated that the supply that is being transported is not the money but 'goods' and as they cannot use it for any purpose, the same cannot be used as legal tender at any stage of the performance of the services rendered by them. The AAAR concurred with the applicant's submission.