Sale of Old car Purchased before GST regime

[DK AGGARWAL]

Dear Sir

We purchased a car before GST regime in May 2017. Now we have sold the car as under. Please inform the GST tax implications

Cost in May 17--------------------------------------------------8 lac

Depreciated value as per books-------------------------------6 lac

Sold now-----------------------------------------------------------4 lac

Please inform if any tax is to be charged

Regards

D K Aggarwal

[Prudhvi Jakkula]

As the margin is negative, tax is not required to be paid.

[DK AGGARWAL]

Thanks Sir for the quick response

D K Aggarwal

[Nandan Khambete]

WDV of Car as per Income Tax has to be compared with Selling price. WDV as per Companies act is not relevant. Check Notification no.8/2018 - Central Tax Rate dt 25/1/18

[KASTURI SETHI]

As per profile, the querist is not dealing in purchase and sale of old and used car.It is not his business. In pre-GST era, he was a distributor of chemicals and also importer. So he must have been registered with the department. He might have claimed depreciation under Income Tax Act or Cenvat Credit under Cenvat Credit Rules, 2004 (my presumption) . So the benefit of 'margin scheme' is not available to the querist. The following Board's Flyer is also worth reading in this context:-

Margin Scheme in GST

[Nandan Khambete]

Dear Kasturiji,

Kindly go through below Notification :

Notification no.8/2018 - Central Tax Rate dt 25/1/18

This does not talk about margin scheme for Dealers.

[Prudhvi Jakkula]

I too expressed my opinion based on that notification only.

[KASTURI SETHI]

Dear Sh. Nandan Khambete Ji,

Sir, I agree with you. Views expressed by me are additional information.

AI Summary

GST on resale of pre GST used car: margin scheme eligibility and dealer status determine taxability on sale.
Sale of a motor vehicle acquired before GST raises whether GST applies on resale and whether the margin scheme can be used. No GST is indicated where the seller is not a dealer and the margin is negative, but the margin scheme may be unavailable if the seller previously claimed depreciation or availed pre GST credits. Assessments should consider the seller's dealer status, prior credit or depreciation claims, and applicable government notifications regulating second hand goods and margin treatment.