ITC on Purchase of Car and Reversal of ITC & levy of GST on Sale after say 2 years

[SHAILENDRA singh]

Dear All,

Please consider a case where Company 'A' purchases a Car for transportation of passengers and sells it after 2 years of use.

(a). Whether Company 'A' was right in claiming ITC at time of purchase of car?

(b). Is there any provision for reversal of ITC since the Car was sold after using it for 2 years?

(c) Whether 'A' needs to charge GST at time of selling the Car?

(d) Does the 'Yellow' or 'White' number plate makes any difference for the purpose of ITC ?

Thanks!!

[Himansu Sekhar]

A. Yes

B.yes ,sec 18(6) of cgst act

C.the same amount as mentioned at B above

D. No difference. White means personal use. ITC not available.

AI Summary

Input tax credit reversal required on sale of used car leads to GST charge on resale after use. Input Tax Credit was allowable where the car was purchased for passenger transportation. Upon later sale, the CGST reversal provision mandates reversal of credit taken, and GST on the sale must be charged corresponding to that reversal. Number-plate colour does not affect the reversal rule, though a white plate indicates personal use and precludes ITC.