TaxTMI 
TaxTMI 
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.
GST on re-possessed asset by Nationalized Bank
29 Jul 2020 
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GST on repossessed assets: treatment hinges on application of Rule 32(5) and borrower's registration status.
GST on bank sales of repossessed assets depends on the margin scheme under Rule 32(5) and the borrower's registration status: one view holds that resale below the original price attracts no GST under the margin scheme; another applies a time-based reduction to determine purchase price for second-hand goods; a separate interpretation treats sales from repossession by a registered borrower as fully taxable while applying the reduced-purchase-price rule only for unregistered borrowers. (AI Summary)
GST on bank sales of repossessed assets depends on the margin scheme under Rule 32(5) and the borrower's registration status: one view holds that resale below the original price attracts no GST under the margin scheme; another applies a time-based reduction to determine purchase price for second-hand goods; a separate interpretation treats sales from repossession by a registered borrower as fully taxable while applying the reduced-purchase-price rule only for unregistered borrowers. (AI Summary)