Rule 32(5)-second hand vehicle sale

[Sarjeet Shekhawat]

(5) Where a taxable supply is provided by a person dealing in buying and selling of second hand goods i.e., used goods as such or after such minor processing which does not change the nature of the goods and where no input tax credit has been availed on the purchase of such goods, the value of supply shall be the difference between the selling price and the purchase price and where the value of such supply is negative, it shall be ignored:

Provided that the purchase value of goods repossessed from a defaulting borrower, who is not registered, for the purpose of recovery of a loan or debt shall be deemed to be the purchase price of such goods by the defaulting borrower reduced by five percentage points for every quarter or part thereof, between the date of purchase and the date of disposal by the person making such repossession.

How to calculate purchases price in the case of defaulting borrower not registered under GST ??

AI Summary

Second-hand goods valuation: margin method applies; repossessed goods from unregistered borrower use deemed purchase value reduced over time. Rule 32(5) sets the taxable value for dealers in second hand goods who did not claim input tax credit as the difference between selling price and purchase price (negative differences ignored). For goods repossessed from an unregistered defaulting borrower, the purchase value for margin calculation is deemed to be the borrower's original purchase price reduced by five percentage points for each quarter or part thereof between purchase and disposal.