Sale of old commercial vehicle

[Syamaprasad Menon]

How the sale of a used commercial goods carrier, TATA Ace, bought during the VAT regime, claiming ITC, with the sale value exceeding the WDV by a few thousand, can be legitimately accounted - the rate of GST - will compensation cess need be levied etc

[KASTURI SETHI]

If input tax credit under GST or Cenvat credit under Cenvat Credit Rules or ITC under State VAT has been availed on old and used motor vehicles, exemption from payment GST Compensation is not available. Compensation Cess is leviable w.e.f.25.1.18. See Notification No. 1/2018-C.C. (Rate), dated 25-1-2018. Rate of cess depends on engine capacity.

[KASTURI SETHI]

In this scenario, input tax credit/Cenvat Credit/VAT credit has been availed, hence margin scheme for valuation purpose is not available.Notification No. 1/2018-C.C. (Rate), dated 25-1-2018 refers.

[Syamaprasad Menon]

thanks for the response

AI Summary

Compensation cess liability arises on sale of used commercial vehicle when input tax credit was claimed; margin scheme not available. Where input tax credit, Cenvat credit, or VAT ITC was availed on a used commercial motor vehicle, compensation cess is not exempt and is leviable at rates linked to engine capacity; the margin scheme for valuation is not available when such credits have been claimed.