GST on Sale Used Car on which ITC was availed

[SHAILENDRA singh]

I'm in process of selling a car which was purchased 1 year ago for the purpose of transportation of passengers hence ITC was take at the time of purchase. what rate of GST should i Charge? on what value? is there any cess applicable ?

[Ganeshan Kalyani]

In my view, GST is applicable on the difference of Sale value and the purchase price. Cess is not applicable.

[Ganeshan Kalyani]

Gst rate @12% or 18% applicable as per the specifications of the car.

[Ganeshan Kalyani]

Refer notification no. 8/2018 CTR

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Shri Ganeshan.

[VAMSI KRISHNA]

Respected Experts,

as per my knowledge law is soo clear about Rule 32(5) (for your reference reproduced below) will be applicable in this particular case. aforesaid rule is applicable if no input tax credit is taken while purchase of goods, but querist taken input....

am here requesting you to

1) reconsider my comments on your reply.... ​​provide your valuable reply again.​​​

2) am seeking legal base for non applicability of cess to this case,,, if your support is para 42A of notification 1/2017 compensation cess (rate) as ammeded by notification no 1/2018. am here clarifiying that aforesaid entry is not applicable if input tax credit is taken at the time of purchase..... so cess is applicable in this case.

Respected Querist,

in my view,

as for as rate concernd,,,, refer the notification as suggest by experts.

as for as the value is concerned,,,, you should charge on selling price of good (subject to conditions as specified in valuation rules).

as for as cess is concerned,,, cess is applicable. for rate of cess kindly refer NOTIFICATION NO. 1/2017-COMPENSATION CESS (RATE)

Rule 32(5)----- Where a taxable supply is provided by a person dealing in buying and selling of second hand goods i.e., used goods as such or after such minor processing which does not change the nature of the goods and where no input tax credit has been availed on the purchase of such goods, the value of supply shall be the difference between the selling price and the purchase price and where the value of such supply is negative, it shall be ignored:

Provided that the purchase value of goods repossessed from a defaulting borrower, who is not registered, for the purpose of recovery of a loan or debt shall be deemed to be the purchase price of such goods by the defaulting borrower reduced by five percentage points for every quarter or part thereof, between the date of purchase and the date of disposal by the person making such repossession.

dear all am looking forward for your valuable response in this regard.

Thanks to all.

AI Summary

GST on used car sales: tax based on selling price where input tax credit was claimed; rates and compensation cess apply. GST on sale of a used car for which input tax credit was availed should be determined under the GST valuation rules by reference to the selling price rather than the difference in value method applicable where no ITC was taken; applicable GST classification determines the rate and relevant compensation cess notifications must be consulted for cess liability.