Margin scheme for car dealer under GST

[MANOHAR KALBURGI]

Dear sir,

Our car dealer sells used car where such used cars are purchased from unregistered person as well as registered person under GST.

Question. Can we opt for margin scheme for supply taken from unregistered person and apply normal valuation for car purchased from registered person and avail the ITC on it.

Hence my final doubt is that, are both valuation allowed for car dealer ? i.e. One car for valuation under 32(5) and other car for valuation under sec 15.

Thanks in advance.

AI Summary

Car dealers can use GST margin scheme for unregistered seller purchases and claim ITC for registered ones per Rule 32(5). A car dealer inquired about applying the GST margin scheme for used cars purchased from unregistered sellers, while using normal valuation for cars bought from registered sellers and availing Input Tax Credit (ITC). Responses indicated that it is permissible to use both valuation methods, as the margin scheme is not mandatory for all types of supply. One reply clarified that Rule 32(5) of the CGST Rules, 2017, allows the value of supply to be the difference between selling and purchase prices for second-hand goods, provided no ITC is claimed on the purchase.