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 and SUN]

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

AI Summary

GST on used machinery payable on transaction value; depreciated value may determine assessable value where no input tax credit
Sale of used machinery sold interstate is taxable under GST on the transaction's assessable value; depreciated or written down value may be used to determine that transaction value, but the applicable GST rate depends on the machinery's HSN/tariff classification rather than its used status. Absence of input tax credit on the original purchase affects credit availability and related adjustments, and the supplier must remit GST on the transaction value accordingly.