Applicability of Notification 8 of 2018 - Composition Taxable Person

[Sooraj B]

Can a composition taxable person avail the benefit of Notification 8 of 2018 (CTR) in respect of sale of used vehicles. Under the Notification, exemption is given in the tax rate (tax in excess of 18% shall be exempt). So if a composition dealer (say a trader) sells a second hand vehicle, will he be liable to pay GST @ 1%or 18% on the margin amount?. If the notification is not applicable to a composition taxable person, I suppose he will be liable to pay GST @ 1% on the entire sales consideration.

AI Summary

Composition dealers cannot use GST margin scheme benefits under Notification 8/2018 for used vehicle sales A composition taxable person inquired whether they could benefit from Notification 8 of 2018 regarding GST exemption on used vehicle sales, specifically whether they would pay 1% or 18% GST on the margin amount. Multiple experts responded that composition dealers cannot avail the margin scheme benefit under this notification. The notification provides exemption only on marginal tax for regular dealers, not composition taxpayers. Composition dealers must pay GST at the applicable composition rate on the entire sale consideration, not just the margin. The schemes are independent and cannot be combined for double benefits. Therefore, when a composition dealer sells second-hand vehicles, GST applies at 1% on the full transaction value rather than 18% on the margin amount.