Tax on Old Imported Machinery

[Gaurav Arora]

Hi,

I want to sell my old Imported Machinery. And the buyer is in South India and I'm In North India.

So I just want to Know how I can send him the machinery, covering GST parameters.. and how much GST will be charged.

Machines was imported in 2011.

Thanks

Gaurav Arora

[SHARAD ANADA]

Pl refer sec 18(6) of CGST Act 2017

(6) In case of supply of capital goods or plant and machinery, on which input tax credit has been taken, the registered person shall pay an amount equal to the input tax credit taken on the said capital goods or plant and machinery reduced by such percentage points as may be prescribed or the tax on the transaction value of such capital goods or plant and machinery determined under section 15, whichever is higher:

In your case as you have import machinery in 2011 and you have not taken ITC ( refer sec 2(62) for definition of input tax under GST Act) then you have to charge GST on transaction value.

[Gaurav Arora]

Thanks for the reply.

But as of now I have closed my business and Surrendered my GST no.

In this case what will be the solution.

[KASTURI SETHI]

What is the date of surrender of Registration Certificate ? If surrendered but not cancelled, your account will remain open and you can pay due tax. Normally, one month is taken for cancellation after the date of surrender on Common Portal System. Tax has to be paid.

[SHARAD ANADA]

Refer rule 20 of CGST rule 2017

20. Application for cancellation of registration.-A registered person, other than a person to whom a registration has been granted under rule 12 or a person to whom a Unique Identity Number has been granted under rule 17, seeking cancellation of his registration under sub-section (1) of section 29 shall electronically submit an application in FORM GST REG-16, including therein the details of inputs held in stock or inputs contained in semi-finished or finished goods held in stock and of capital goods held in stock on the date from which the cancellation of registration is sought, liability thereon, the details of the payment, if any, made against such liability and may furnish, along with the application, relevant documents in support thereof, at the common portal within a period of thirty days of the occurrence of the event warranting the cancellation, either directly or through a Facilitation Centre notified by the Commissioner

Before filling cancellation application you have to submit all your latest GSTR 3B and GSTR 1. For eg you are applying today your GSTR 3B and GSTR 1 for the month of April 19 should be filed.

After filling cancellation application proper office either call for explanation or if no explanation is required then he will pass a cancellation order. After cancellation order file your final return in GSTR 10 within 3 months from date cancellation.

Also refer sec 45 of CGST Act 2017

as may be prescribed.

45. Every registered person who is required to furnish a return under sub-section (1) of section 39 and whose registration has been cancelled shall furnish a final return within three months of the date of cancellation or date of order of cancellation, whichever is later, in such form and manner as may be prescribed.

Also file your annual return for FY19-20 in GSTR 9 in due time.

[Gaurav Arora]

How I can check, that my surrendered GST is cancelled or still active.

[SHARAD ANADA]

Proper officer will serve cancellation order. You can also check by login to your account on GST portal. Click on profile tab. There you will find your status Active/ Cancelled

[Gaurav Arora]

Hi,

My GSTIN / UIN Status shows Cancelled.

I think it means my GST no. Is cancelled and I can't use it any more.

Pls suggest how I can sell my imported machine to South India from North India, as now my GST no. is also cancelled, I can't use it.

Thanks

Gaurav

[KASTURI SETHI]

Common Portal System is not synchronized with GST Acts. Your account should remain open until or unless final return is filed. Deposit of tax in in the interest of nation. So you should contact helpdesk/Grievances Redressal Cell for this purpose. Your account can be reactivated for deposit of tax against this registration no. by the officials of Common Portal System only with the permission from the GST Officer who issued the order for cancellation. So contact the jurisdictional Range Officer or Deputy Commissioner, In-charge GST Division. Thus some way-out will be evolved. Reopening is possible. Make efforts.

AI Summary

GST on sale of used imported machinery requires tax on transaction value if no input tax credit; registration needs reactivation. Where input tax credit was taken on capital goods, section 18(6) requires payment equal to either the residual ITC reversal (as prescribed) or tax on the transaction value, whichever is higher. If no input tax credit was claimed on the imported machinery, GST must be charged on the transaction value. Cancellation does not relieve tax liability: outstanding GSTR-1 and GSTR-3B must be filed before cancellation, and a final return must be filed after cancellation; reactivation of registration may be necessary to remit tax.