GST on re-possessed asset by Nationalized Bank

[SHARAD ANADA]

A nationalized bank repossessed assets from defaulting borrower who is registered under GST. The original cost of plant and machinery purchased by the borrower before 2 years was 50 lakh and GST paid by him was 9 lakh. Bank is able to sale this machinery at 25 lakh. Amount outstanding in the borrower account is 27 lakh. On what value GST will be applicable.

AI Summary

Debate on GST Applicability for Repossessed Machinery Sale by Bank: Rule 32(5) Margin Scheme Considered A nationalized bank repossessed machinery from a GST-registered defaulting borrower, initially purchased for 50 lakh with 9 lakh GST paid. The bank sold it for 25 lakh, with 27 lakh outstanding in the borrower's account. The discussion focuses on the applicable GST value. One expert suggests the margin scheme under Rule 32(5) applies, indicating no GST due since the resale price is lower. Another expert advises calculating the purchase price by reducing it by five percentage points per quarter since purchase. A third expert notes that for registered borrowers, the entire consideration is taxable.