Car from employer GST

[Ashok kumar]

Hi ,

I have taken a car through my company on lease, company provided to me by taking from another financial company and at the time of separation , i have to purchase the same. what will be GST obligation.

thanks

[KASTURI SETHI]

This supply is in the course of business or furtherance of business and hence taxable.

[Ashok kumar]

They are chaging 29.25% gst , it it right

[KASTURI SETHI]

This is GST rate (28 % = 14 +14%) for new vehicle. See Notification No.1/17-CT(Rate) dated 28.6.17 as amended from time to time up to 31.12.2018. Serial No.165 (8703).

And see notification no.5/17-CC (Rate) dated 11.9.17 for Cess.

[Ganeshan Kalyani]

You may refer Notification no.8/2018-CTR dated 25.01.2018.

[Ashok kumar]

Thanks but can you just help me understand whether they are charging the correct percentage.

[KASTURI SETHI]

GST Rate 29.25% is correct. For old & used car follow the reply of Sh.Ganeshan Kalyani Ji. You are to decide from both options/Notifications.

[RAKESH R]

Sir

If thecar is a business asset in the books of the employer and employer claimed depreciation for income tax assessments then the taxable value for such used car shall be “ the difference between the depreciated value as onthe date of sale and actual sale value realised from buyer. If if the difference is positive GST 18% or 12% ( see Notifications Jan 2018) is payable on the difference. If the difference is negative you may ignore.

However the higher purchase agreement is to be seen for conditions if any to decide sale of new car or used car

Gokarnesan

Advocate

[Ganeshan Kalyani]

Depreciation to be calculated as or income tax rates.

AI Summary

GST on vehicle sale: taxability and valuation rules govern charging GST when an employee buys a leased company car. GST is payable when an employer-facilitated leased vehicle is purchased on separation; for new vehicles the discussion cites a 28% GST rate plus a cess leading to a combined charge referenced as 29.25%. For used business assets on which depreciation was claimed, the taxable value is explained as the positive difference between the written down (depreciated) value and the actual sale price, with GST applied on that difference at the notified rates for used vehicles (noted as 18% or 12% in the discussion).