sale of car

[DK AGGARWAL]

Sir

we want to sell the old car purchased before July 2107, registered in the name of Firm to another firm duly registered under GST.

Please inform if GST is applicable on sale of old car and if so whether GST input is available to the new buyer.

Please inform the rate of GST if applicable

Regards

D K Aggarwal

[CSSANJAY MALHOTRA]

Mr. Venkatesh,

Request you to go through Point No 2 of Notification No 37/2017-CGST besides GST Council Press Release. Afterwards views most welcome.

[Keyur Mehta]

Dear Mr. Sanjay and Mr. Rajesh,

Your contribution on this post has been highly enlightening and detailed. A very healthy discussion. However, most confusing to conclude.

View presented by Mr. Rajesh leads to the conclusion that one should pay the tax going by the language in the Schedules. Whereas views presented by Mr. Sanjay leads to the conclusion that one should not pay the tax and awaken the Govt against such double taxing provisions.

Thanks once again for bringing lot of insight into the issue.

[NITIN LADDHA]

Dear Sanjay ji and Rajesh ji

Thanks for this post, very informative and useful.

I have one query regarding conditions of Notification No 37/2017-CGST, can we read both the conditions as ÁND' i.e 1) Motor Vehicle was purchased by Lessor..... AND 2) The Supplier of MV is registered person...? If this understanding is correct than it appears that the Notification No 37/2017 is only for Sale of Leased vehicles which were supplied on lease before 1 July 2017. Also the condition of applicability of this notification only till 1 July 2020 points in this direction.

I have a similar query as of D K Aggarwal Ji, for one of the client we have claimed deprecation on a MV as it is used in business and now need to dispose off the MV but not clear as to GST impact on such transaction ?

Both the arguments : 1) permanent disposal of business Assets- treated as supply and 2) Double taxation of transaction are compelling. Kindly guide.

[Vijay Singh]

After noti.no.08/2018 CGST (r) dtd.25.01.2018.

Pl explain the situation..

[Vijay Singh]

Pl explain the below situation..
If the depreciated value is 6L and selling price is 5.5 than if a firm want to sell a used car within the state .. what tax he have to pay.

Please refer the point 1 for purposes of this notification, -

(i) in case of a registered person who has claimed depreciation under section 32 of the Income-Tax Act,1961(43 of 1961) on the said goods, the value that represents the margin of the supplier shall be the difference between the consideration received for supply of such goods and the depreciated value of such goods on the date of supply, and where the margin of such supply is negative, it shall be ignored

[Ravindra G]

Hello,

You have two ways for invoicing.

1. consideration value / agreed sale value / deal value.

WDV of said car ₹ 10000/- (-) deal value ₹ 9000/- = Loss ₹ 1000/- "No GST will be attract."

WDV of said car ₹ 10000/- (-) deal value ₹ 15000/- = Profit ₹ 5000/- "GST will be attract on Profit @ 18%."

2. Abetment

You can take 35% abetment on consideration value / agreed sale value / deal value & charge GST @ 18%.

consideration value / agreed sale value / deal value ₹ 100000/- (-) Abetment @ 35% Rs. 35000/- = Taxable ₹ 65000/-

Thanks.

[MANAV KEDIA]

Sir, Please clear the query raised by Nitin Laddha ji on 23rd January 18.

[LAKSHMINARAYANAN TR]

Dear Sir

Please refer the Notification No. 8/2018 -Central Tax (Rate) dated 25th Jan 2018. Disposal of old and used goods is taxable on the margin. Rate various depends upon the category listed on the notification. Any registered person under schedule II becomes liable to pay GST on disposal of asset permanently.

[KASTURI SETHI]

Sh.Lakhshminarayan Ji, Thanks for updation and correlation .

[Tarun Agarwalla]

dear Sir

I would like to bring the attention to the definition of business as per ACT. which covers single transaction to its ambit.

AI Summary

Taxability of used motor vehicles: GST applies on disposal of business assets, with margin valuation and ITC restrictions.
Disposal of a used motor vehicle by a registered person engages GST as a transfer or disposal of business assets under Schedule II and Sec 7(1), while Sec 17(5) restricts Input Tax Credit for motor vehicles. Notifications and CGST rules provide alternative valuation approaches: taxable value may be fixed at a concessional portion of consideration or determined under the margin scheme as the seller's margin (difference between sale price and purchase or depreciated value where depreciation was claimed). The applicable tax is the motor vehicle tax rate plus any cess, and treatment varies by dealer status and prior ITC.