Clarification Regarding Applicable GST Rate on Sale of Second-hand Trucks.

[Govinda R]

Hi,

Can anyone help me with the applicable GST rate?

I am engaged in the business of buying and selling second-hand trucks. I purchase the trucks from a company that does not charge GST, so the GST liability falls on me.

For example, I buy a truck for ?10,00,000, make some minor modifications, and then sell it for ?12,00,000.

Is Rule 32(5) applicable in my case? If yes, what would be the applicable GST rate? I do not want to claim any input tax credit, as the seller does not charge GST.

Lastly, how should I report my turnover under GST and Income Tax?

Since my bank receipts will show ?12,00,000, but under GST I declare only my margin of ?2,00,000, wont there be a mismatch between the GST turnover and the Income Tax turnover?

And pls let me know is there any other way which will be beneficial.

AI Summary

Margin scheme: GST charged on dealer's margin when no input tax credit is claimed and reconcile with income tax turnover.
Rule 32(5) prescribes that when second hand goods are sold without claiming input tax credit, the taxable value is the margin (selling price minus purchase price), provided the goods' nature is unchanged; GST is payable on that margin and negative margins are ignored. For GST turnover the margin is reported, while income tax requires gross receipts reporting, necessitating reconciliation and maintenance of documentation evidencing purchase, sale, and non availment of ITC.