sale of car

[YUWRAJ KOTHARI]

1.Business line is manufacture of Transformer. Motor Car purchased in VAT era (No ITC taken) used as capital asset, now sold, whether GST is applicable on sale of motor car. If applicable, whether GST is to be charged on profit on sale of motor car or the entire sale proceeds.?

2. If car was purchased in GST era and sold in GST era(no ITC taken but depreciation has been taken),whether GST is payable and if payable on what value GST shall be payable i.e. whether on sale realisation value or profit on sale of motor car ?

[Ganeshan Kalyani]

As per Notification no. 8/2018-CTR of 2018 , supply of old and used motor vehicle when input tax credit was not taken, the GST applicable is on the differential value of sale proceed and depreciated value as per income tax.

In your case in either case GST will become applicable only on the margin as worked out as per aforesaid formula.

[KASTURI SETHI]

I concur with the views of Sh.Ganeshan Kalyani Ji.

[Mahadev R]

I concur with views expressed by experts

AI Summary

GST on sale of used motor vehicles applies to the margin between sale proceeds and income-tax depreciated value. Where input tax credit was not taken on a motor car, GST on its subsequent sale is computed on the margin equal to sale proceeds less the depreciated value as determined for income tax; this applies whether the car was acquired in the pre-GST or GST period and holds even if depreciation was claimed.