There are taxpayers who claim ITC on their motor vehicles (cars and bikes) thinking if they buy in their business name, credit is available.
Please bear in mind as per section 17(5) clause (a) motor vehicles for the transportation of passengers (cars & bikes) less than 13 seater including driver ITC will not be available unless if
(a) you are a dealer of such motor vehicles or
(b) you are in the business of transportation of passengers
(c) you are a driving school
Any motor vehicles used for transportation of passengers more than 13 seater, there is no restriction on claiming ITC.
Goods Motor vehicle also there is no restriction on availing ITC.
Very important, if the credit of motor vehicle is blocked as per above provisions, then all ITC on related expenses like repairs & maintenance, insurance etc also is blocked.
Then also, if the ITC is taken by the taxpayers it is taken on their own peril and it is not very difficult for the department to identify such credits based on HSN and subsequently heavy price has to be paid by way of interest and penalty and of course reversals of such credits.