Reporting the Sale of Motor Vehicles / Capital Goods under GST in Returns Across Various Scenarios

[Rajagopal K]

Experts’ Opinions Requested on the Following Scenarios:

1. Sale of Motor Vehicle - No GST Charged (Sale Value Less Than WDV)

Question:

If the sale value of a motor vehicle is less than the written down value (WDV) and no GST is charged (e.g., sale value Rs. 47,000, WDV Rs. 48,000), how should this transaction be reported in GSTR-1 and GSTR-3B?

2. Sale of Motor Vehicle - GST Charged (Sale Value Greater Than WDV)

Question:

If the sale value of a motor vehicle is greater than the WDV and GST is charged (e.g., sale value Rs. 50,000, WDV Rs. 48,000), how should this transaction be reported in GSTR-1 and GSTR-3B?

3. Sale of Capital Goods (No GST Claimed, No GST Charged)

Question:

For the sale of a motor vehicle (capital goods) where no ITC was claimed at purchase and no GST is charged on the sale (e.g., sale value below WDV, no GST), how should this transaction be reported in GSTR-1 and GSTR-3B?

4. General Reporting of Loss on Sale of Motor Vehicle (No GST Charged)

Question:

If a motor vehicle is sold at a loss (sale value less than WDV) and no GST is charged, how should this be reported in GSTR-1 and GSTR-3B?

5. Reporting of Sale of Capital Goods (No GST Claimed, Sale Value Less than WDV)

Question:

If a capital good (motor vehicle) is sold at a loss (sale value less than WDV), no GST is charged, and no ITC was claimed at the time of purchase, how should this transaction be reported in GSTR-1 and GSTR-3B?

[Pinnacle Tax Advisor]

Under GST, when a motor vehicle is sold as a capital asset, tax is levied only on the margin, i.e., the difference between the sale value and the written down value (WDV).

• If the sale value is less than or equal to the WDV, no GST is payable, and there is no requirement to report the transaction in GSTR-1 or GSTR-3B.

• If the sale value exceeds the WDV, GST is payable only on the margin (sale value minus WDV). In such cases, only the taxable value along with the applicable GST needs to be reported in GSTR-1 or GSTR-3B.

It is important to note that the portion of the sale value up to the WDV is not treated as consideration for supply under GST when the vehicle is sold as a capital asset.

[Ganeshan Kalyani]

The margin i.e. sales value minus the WDV as per Income tax act, is offered to tax. Margin becomes the taxable value and GST on it is furnished in GST return. 

AI Summary

Sale of motor vehicles: GST applies only to the margin; no GST or GSTR reporting if sale value WDV. Sale of motor vehicles treated as capital goods is taxable only on the margin (sale value minus WDV). If sale value is less than or equal to WDV, no GST arises and no reporting in GSTR-1 or GSTR-3B is required. If sale value exceeds WDV, GST is payable and must be reported on the margin; the portion up to WDV is not consideration for supply.