SALE OF OLD CAR TO CAR24 OR OTHER DEALER

[MAHESH KOPPANETH UNNIKRISHNAN]

Sir, our company has sold a car to Car24 which is platform who finds bidders and sells it to the dealer and then dealer finally sells it to ultimate customer i.e. old car will be registered only after final buyer is found by CAR24.

CAR24 collects the old car and send the consideration there and then to the company.

My question is, whether selling of old car to CAR24 will be treated as sell and GST TAX invoice it to be raised against CAR24 (it is not registering the car in its name) after receipt of consideration though the CAR will not be registered in CAR24 since it is just a facilitator.

Kindly help to find the suitable solution for GST purpose.

Regards

S.K.Gupta

[Kiran Tahelani]

If input tax credit was not taken at the time of purchase, GST applicable is on the differential value of sale proceed and depreciated value as per income tax. Refer: Notification no. 8/2018-CTR of 2018 .

change in the ownership of motor vehicle is governed by motor vehicle act 1988 which has nothing to do with GST act.

therefore you are required to issue invoice to car 24 and pay tax on differential amount if it is positive.

by any chance, If input tax credit was taken at the time of purchase, tax needs to be paid on value as per section 18(6) read with rule 40(2) and compensation cess also needs to be discharged as per Notification No.1/2017-Compensation Cess (Rate)

Seniors and experts may correct me if i am wrong.

[Amit Agrawal]

Facts are not clear.

It appears that Car24 is not buying car from your Co., but only facilitating its' sell to the ultimate buyer. In other words, it seems that your Company is selling car to the ultimate buyer (i.e. final buyer, under whose name, car is getting registered after sale.)

If you have not supplied anything to Car24 (i.e. if you have not sold car to them), questing of raising tax-invoice on Car24 does not arise.

I am not sure I have understood context of query / reason for confusion.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Padmanathan KV]

I agree with Kiran Ma'am. The transaction between your company and Car24 seems to be on principal-to-principal basis. Car24 seems to be purchasing car from you and selling to dealer who will ultimately sell it to end customer. Moreover, Car24 does not seem to be acting on a commission basis form your query.

Only the registration is directly done in the name of end customer. This might be done to avoid multiple registration of the same vehicle.

Thus, your company has to raise GST invoice on Car24.

[Shilpi Jain]

Agree that registration of car is of no relevance to decide whether sale is made to car 24 or not.

Also some more clarity is required on the transaction. Pls chk how car 24 is billing. If they are billing to client then it means you are selling to car 24. Accordingly pls consider your billing

AI Summary

GST on sale to intermediary platforms: invoice the purchaser if platform buys; valuation hinges on input tax credit status. If the platform purchases as principal the supplier must invoice the platform notwithstanding registration in the end buyer's name; if the platform is only a facilitator, invoice the ultimate buyer. Where no input tax credit was taken, GST is payable on the differential between sale proceeds and depreciated value; where input tax credit was taken, tax is payable on the full value of supply and compensation cess applies. Verify how the platform bills to determine the correct party to invoice and the applicable valuation rule.