GST IMPACT ON DEALER OF SECOND HAND VEHICLE

[NAMAN DOKANIA]

A dealer registered under gst purchases second hand vehicles and sale that after adding his margin in two ways described below:

1. Purchase seocnd hand vehicle in his own name and then sale that to customer

2. Purchases second hand vehicle and sale that without incorporating his name and just acts an intermediary and just earns the margin as income.

In these two cases please help me with the updated law on the taxability and whether can he take any itc on the improvements made in the car before selling it off in both thses cases??

AI Summary

GST on Second-Hand Vehicle Sales: 18% on Margin as Intermediary, Direct Sales Follow Notification 8/2018-CT R Rules A dealer registered under GST inquires about the tax implications when selling second-hand vehicles in two scenarios: selling in their own name or acting as an intermediary. Responses clarify that as an intermediary, GST is 18% on the margin, while direct sales incur GST only on the margin per notification 8/2018-CT R, with no input tax credit (ITC) on the vehicle itself. ITC is available for repairs and maintenance. The margin scheme cannot be used if ITC is claimed, and once opted, it must be used for the entire financial year. Notification 10/2017-CT R is discussed but deemed inapplicable due to changes in provisions.