Dear Sir,
We are manufacturer and launch scheme for employee. We provide car to employee for company and personal use under agreement/ scheme of 4 years. Under scheme the employee pay 52% and we employer pay 48% of EMI. We don't claim of ITC but ,book the cars in our account and claim the depreciation under income tax act. After complication of 4 year we transfer the car to employee.
Now the question is that any GST is applicable on it after 4 year at the transfer of car to employee ?.
GST Applicability on Car Transfers to Employees After 4-Year Scheme: Business Purpose and Profit Impact Explored A company provides cars to employees under a four-year scheme where employees pay 52% and the employer 48% of the EMI. The company claims depreciation on the cars but not Input Tax Credit (ITC). After four years, the car is transferred to the employee. The main query is whether GST applies to this transfer. Responses suggest that since the transaction isn't in furtherance of business and no supply occurs, GST may not apply. However, if profit arises at the time of transfer, GST might be applicable. ITC is blocked for vehicles with less than 13-passenger capacity. The discussion also touches on the applicability of the margin scheme and related GST notifications. (AI Summary)
TaxTMI 
TaxTMI 
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