Sale of old car

[Subir Bose]

Dear sir,

My partnership firm wants to sell a car purchased in the year 2009 to a unregistered person and also wants to buy a new car. So is gst applicable on sale and itc applucale on puchase of new car?

Subir Bose

AI Summary

GST Applies on Old Car Sales; No ITC for New Car Purchases per Section 17(5) CGST Act, 2017 A partnership firm inquired about the applicability of GST on selling an old car to an unregistered person and the eligibility for Input Tax Credit (ITC) on purchasing a new car. Responses indicated that GST is applicable on the sale of the old car, while ITC is not available for the purchase of a new car, referencing Section 17(5) of the CGST Act, 2017. Additionally, IGST Notification No 09/2018 affects the tax calculations for old cars. Concerns were raised about double taxation, as ITC is generally not available for car purchases, yet GST is required on sales.