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

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.