Sale of Old Machinery

[Rajendra Prasad]

Dear Sir,

I am owning a Factory. The product is exempt under VAT Act and GST Act.

I have set up this unit 10 years back. No ITC was taken either in the VAT Law / GST Law. Now also the factory is not registered under GST as sale is fully exempt.

Now I am seeling the old Plant & Machinery for ₹ 75.00 Lacs.

Is the transaction liable for GST.

[Rajagopalan Ranganathan]

Sir,

The reply to your query is 'no' since you manufacture exempt goods and you have not availed input tax credit of tax paid on capital goods.

[YAGAY and SUN]

In this connection you need to give reference of your old Invoice against which you had procured such P&M without availing the CENVAT and ITC Credit, while selling the goods by issuance of Bill of Supply. Fixed asset register and a certificate from CA will also required.

[KASTURI SETHI]

I support the views of both experts.

[SHARAD ANADA]

It is supply as per section 7 of CGST Act. The machinery itself is not exempt. Value of supply is more than 20 lakh you need GST regn. also.

In my view you have to pay GST @ rate as per HSN of machinery you are going to sale.

[Resham Sidhu]

I agree with Mr Sharda Nanda

[A SUBRAHMANYAM]

The products sold by them are exempted and not the Machinery they sell when it is valued more than 20 lakhs. The activity is liable for GST

[Guravaiah Manam]

IT IS TAXABLE

[AM Sameer]

The Transaction is taxable irrespective of INPUT TAX Credit availed or not

AI Summary

Taxability of sale of used machinery: such disposals can attract GST and require registration when value exceeds threshold.
Disposal of used plant and machinery is treated as a supply under GST and generally taxable; when the transaction value exceeds the statutory registration threshold the seller must register and charge tax at the HSN based rate. Non availment of input tax credit on acquisition affects invoicing and evidence requirements (bill of supply, original invoices, fixed asset register, CA certificate) but does not by itself negate taxability; some practitioners note a contrasting practical view reliant on documentary proof where goods manufactured are exempt.