Transfer/sale of used motor vehicles for a consideration at wdv,Rate of Tax ? Marginal scheme applies? can recipient avail ITC ?

[SOPL SOPL]

Sir/madam,

I explained my issue with a practical instincts

Motor vehicles are purchased by supplier in VAT era, and also ITC not availed, at present the referred vehicles are selling at WDV value + 5% margin

sale or Transfer of motor vehicles (No.10) =63,00,000/-

Depreciation taken as per IT act

Wdv of 10 vehicles is 60,00,000/-

Here my doubt is,

valuation in case of sale of motor vehicle ?

is margin scheme - i.e, Notification no.8/2018-central tax rate dated 25.01.2018

as per this notification tax is payable on margin value (consideration received- wdv)

rate of tax =18 %

is this notification is applicable for sale of motor vehicle ?

Suppose, if above notification doesnot applies , please specify the reason and also mention alternative implications , i.e, rate of tax, taxable value for GST implications

Thanking in advance

Regards

Gowtham

[Rajagopalan Ranganathan]

Sir,

In my view you can sell the cars on payment of tax @ 18% (as per Notification No.8/2018-CT(Rate) dated 25.1.18 on the transaction value. The difference between the purchase price and selling price is for the purpose of valuation only. If the difference is negative then you need not pay any tax.

[KASTURI SETHI]

In the above scenario, Notification No.8/2018-CT(Rate) dated 25.1.18 is applicable for the sale of old and used motor vehicles.

AI Summary

Margin scheme applicability for used motor vehicle sales - tax measured on transaction value; margin affects valuation. The issue concerns whether Notification No.8/2018 CT(Rate) (margin scheme) applies to sales of used motor vehicles sold at written down value plus margin. Replies state the notification is applicable, tax is payable on the transaction consideration with the margin affecting valuation, and if the selling price is below WDV no tax is payable; the responses do not address recipient input tax credit entitlement.