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

[Prakash and Thiagarajan]

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

GST on used electric vehicles: consider charging the standard rate on full consideration instead of applying the margin scheme.
The margin-scheme exemption taxes the supplier's margin at the rate applicable to goods in the schedule covered by that provision, but electrically operated vehicles fall under a lower-rate schedule; therefore the margin scheme provision may not apply and tax should be charged on the total consideration at the scheduled lower rate for electrically operated vehicles rather than on the margin.