GST reporting on sale of used car

[Mohideen A]

Dear Experts,

we wish to draw your attention to Notification no 8/2018 dt 25th Jan 2018 regarding GST levy on margin amount on supply of used motor vehicles( including cars).

Background: we are a registered person into IT/ITes sector, and we had transferred used motor vehicle to a registered person ( car dealer). From the notification it is inferred the tax shall be levied on the margin between consideration received for supply of such goods and the depreciated value of such goods on the date of supply, and where the margin of such supply is negative, it shall be ignored. Since we the margin value for the transaction undertaken by us is negative, GST levy on this supply is ignored.

Our concern is w.r.t reporting the transaction in e-invoice & GST portal since the value is ignored for GST liability discharge, wherein can we report this under B2B tab with tax rate as zero since the margin value is negative.

[Ganeshan Kalyani]

Sir, there is no table in GSTR-3B and in GSTR-1 to report such transaction. So in my view, no need to furnish the same in the returns.

[Amit Agrawal]

Please see if you can show 'taxable value' as 'zero', then, tax-rate as applicable (NOT 'zero' but applicable tax-rate), then tax payable as 'zero' (because taxable value is 'zero') but invoice value is your 'selling price' while e-invoicing & filing Form GSTR-1.

(GST Portal accepts difference when "taxable value plus tax" is NOT equal to invoice-value. I am not sure if it accepts above transaction with zero taxable value)

Reporting such invoice vide e-invoicing & Form GSTR-1 (if portal indeed accepts as suggested above) means disclosure of 'supply' made by you, whose taxable value as well as tax-payment (both as 'zero') is also considered & shown while filing corresponding month's Form GSTR-3B.

All above are strictly personal views of mine and the same should not be construed as professional advice / suggestion in any way.

AI Summary

GST margin scheme: negative margin supplies may be reported with zero taxable value and nil tax payable on returns. Notification No. 8/2018 treats GST on used motor vehicle supplies under a margin scheme where a negative margin is ignored. One practical view is that no specific reporting field exists in GSTR-1 or GSTR-3B for such zero-tax-margin supplies, so reporting may not be required. An alternative practitioner suggestion is to e-invoice and report in GSTR-1 with taxable value shown as zero, applicable tax rate entered, tax payable nil, and invoice value as the selling price, which-if accepted by the portal-will show the supply in GSTR-3B with zero taxable value and nil tax.