SALE OF USED MACHINERY

[SUNDARA MOORTHI]

MACHINERY PURCHASED DURING VAT REGIME IN 2012. VAT INPUT TAX NOT AVAILED.

DEPRECIATION CLAIMED UNDER INCOME TAX AS PER IT RULES.

THE USED MACHINERY IS BEING SOLD OUTSIDE THE STATE. (INTERSTATE)

THE ISSUE IS WHAT IS THE RATE OF GST AND ON WHAT VALUE.?

NEED A DETAILED REPLY ASAP.

[Ganeshan Kalyani]

GST is applicable on the value of supply at applicable rate.

[KASTURI SETHI]

You are to pay GST at depreciated value. Depreciated value can be computed by many methods but two methods are very suitable and beneficial to the assessees. These are : Written down method and straight line method. Both are easily available on google. You are to choose according to your suitability and by which you can get the maximum benefit.Thus you can arrive at correct transaction value/assessable value for correct payment of tax as per above method prescribed in accounting principles.

Regarding the rate of GST, GST Tariff Act makes no difference whether it is new or old machinery. Chapter/Heading/HSN remains the same. What benefit you can get that is reduction of value(depreciation) and not any benefit from rate of GST for selling/supply of old machinery.

Now there are different slab rates i.e. 28%, 18 %, 5% Rate will be applicable as per type of machinery. Machinery falls under Chapter 84 of GST Tariff Act. Intimate the type of machinery and function/purpose of machinery for correct GST rate.

[CASusheel Gupta]

Since no ITC has been taken under GST, section 18(6) is not applicable.

Pay tax on the transaction value at the rate applicable to new machinery.

CA Susheel Gupta

9811004443

[YAGAY andSUN]

You need to pay applicable taxes on transaction value of the invoice.

AI Summary

GST on Interstate Sale of Used Machinery: Tax on Depreciated Value, No ITC Impact, Section 18(6) Not Applicable A query was raised regarding the sale of used machinery purchased during the VAT regime in 2012, for which VAT input tax was not availed, and depreciation was claimed under income tax rules. The machinery is being sold interstate, prompting questions about the applicable GST rate and value. Responses indicated that GST should be paid on the depreciated value using methods like the written down or straight line. The GST rate depends on the machinery type, with no distinction between new or old machinery. Since no ITC was claimed, section 18(6) of GST is not applicable.