SALE OF MODIFIED COMMERCIAL VEHICLE

[Guest]

RESPECTED EXPERTS,

MY ASSESSES IS A REGISTERED AS A GTA UNDER GST, HE HAS PURCHASED COMMERCIAL VEHICLE WITH HSN CODE 8706 & THEREAFTER VEHICLE IS MODIFIED WITH TANKER UNDER HSN CODE 7310. WE HAVE NOT TAKEN ANY ITC TAKEN ON IT AND DEPRECIATION IS CLAIMED UNDER INCOME TAX ACT,1961. NOW WE ARE SELLING OUR VEHICLE AT THE PRICE BELOW WDV. QUERY IS AS BELOW:

(1) WHETHER ASSESSEE CAN AVAIL BENEFIT OF CGST NOTIFICATION NO.8/2018 DATED 25/01/2018 WHICH DEALS IN GST RATE ON SALE OF OLD/USED VEHICLE. IF YES WHETHER TAX NEED TO BE PAID AS THE ASSESSEE MARGIN IS IN NEGATIVE ( DIFFERENCE BETWEEN WDV AND SALE PRICE).

(2) WHETHER GST IS TO BE CHARGED ON SALE VALUE, IF ASSESSEE DOES NOT FALLS UNDER ABOVE MENTIONED NOTIFICATION NO.8/2018 DATED 25/01/2018 CGST NOTIFICATION.

AI Summary

GST Margin Scheme Applies to Second-Hand Vehicle Sale Below WDV with HSN 8706 and 7310 Modifications A registered Goods Transport Agency (GTA) inquired about the applicability of GST on the sale of a modified commercial vehicle sold below its written-down value (WDV). The vehicle, initially purchased with HSN Code 8706, was modified with a tanker under HSN Code 7310. The query sought clarity on whether the sale qualifies for benefits under CGST Notification No. 8/2018 and if GST should be charged. An expert clarified that the vehicle retains its status as a second-hand good, allowing the use of the margin scheme under GST, which taxes the difference between purchase and sale price, ignoring negative margins.