TaxTMI 
TaxTMI 
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
Sale of old car
02 Apr 2018 
3 Replies 
1123 Views Asked by
GST on sale of used vehicles may be payable while input tax credit is generally ineligible, raising double taxation concerns.
GST on sale of used motor vehicles by a business is taxable and must be discharged when a partnership sells a car to an unregistered person. Input tax credit on purchase of a motor vehicle is generally not admissible, so ITC on acquisition of a new car is ordinarily unavailable. An IGST notification treats old cars as taxable on the written down value minus sale value, producing concerns of double taxation where ITC has been disallowed. (AI Summary)
GST on sale of used motor vehicles by a business is taxable and must be discharged when a partnership sells a car to an unregistered person. Input tax credit on purchase of a motor vehicle is generally not admissible, so ITC on acquisition of a new car is ordinarily unavailable. An IGST notification treats old cars as taxable on the written down value minus sale value, producing concerns of double taxation where ITC has been disallowed. (AI Summary)