Exchange of Car

[Ethirajan Parthasarathy]

A GST registered person exchanges his old car for new car.

The car Company credits him with

1) value of old car

2) Exchange Bonus and

3) Loyalty bonus. Item No. 1 is subject to GST as per notification No.8/2018 dated 25^th January 2018.

Are loyalty Bonus and exchange bonus are also subject to GST.

AI Summary

GST Applies to Old Car's Value Above Book Value, But Not on Exchange or Loyalty Bonuses Per Notification No.8/2018. A GST registered individual exchanged an old car for a new one and received credits for the old car's value, an exchange bonus, and a loyalty bonus. According to notification No.8/2018, the value of the old car exceeding its book value is subject to GST at either 18% or 12%. However, the exchange and loyalty bonuses, considered discounts on the new car's sale price, are not subject to GST.