TaxTMI 
TaxTMI 
Dear sirs,
One of my client, who is dealer in textiles owning a car, now he sold the car and purchased a new car. Whether GST to be paid on car sold in August 2020.?
SALE OF OLD CAR
05 Sep 2020 
7 Replies 
14939 Views Asked by
GST on margin: used-car disposals taxable where input credit taken, charged on sale minus written down value.
GST on sale of a used car depends on whether input tax credit was claimed; if no credit was taken, no GST; if credit was claimed, GST is payable on the margin (sale price minus written down value as per Income Tax Act) and no GST if the margin is negative. Occasional isolated disposals by a dealer may fall below the taxable threshold. Passenger motor car input credits are subject to the blocked-credit rule, affecting tax treatment on sale. (AI Summary)
GST on sale of a used car depends on whether input tax credit was claimed; if no credit was taken, no GST; if credit was claimed, GST is payable on the margin (sale price minus written down value as per Income Tax Act) and no GST if the margin is negative. Occasional isolated disposals by a dealer may fall below the taxable threshold. Passenger motor car input credits are subject to the blocked-credit rule, affecting tax treatment on sale. (AI Summary)