Sale of used Electric vehicle - Ntfn: 8/2018 -Central Tax (Rate)

[Ganesh S]

Dear Members,

Currently, electrically operated vehicles are chargeable to tax at 5% (2.5/2.5). However, in the case of used vehicle, benefit can be taken of Notification 8/2018-CTR to pay tax on margin. If this is opted, then the tax rate is 12% (6/6) vide entry 4 of the said notification. Considering the value of the used car, 5% rate on the total consideration is beneficial than opting for margin scheme at 12%. Further, as the above notification is not absolute, my view is to pay tax on total consideration at 5% instead of 12% on margin value.

Any other views/suggestions.

Rgds, Ganesh.

AI Summary

Clarification Sought on GST Rates for Used Electric Vehicles; Notification 8/2018-CTR May Not Apply as Assumed An individual inquired about the applicable Goods and Services Tax (GST) rates for used electric vehicles, referencing Notification 8/2018-CTR. They noted that while new electric vehicles are taxed at 5%, the notification allows for a 12% tax on the margin for used vehicles. The individual suggested that paying a 5% tax on the total consideration might be more beneficial. A respondent clarified that Notification 8/2018-CTR may not apply to electric vehicles as they fall under Schedule I, taxed at 5%, rather than Schedule IV, which involves a 14% rate.