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

Valuation of second-hand goods: repossessed vehicles have deemed purchase value reduced quarterly, affecting taxable supply calculation.
Valuation for dealers in second hand goods without input tax credit is the difference between selling and purchase price, negative results ignored. For goods repossessed from an unregistered defaulting borrower, the purchase value is deemed to be the borrower's original purchase price reduced by a fixed percentage for each quarter or part between purchase and disposal. Forum replies note valuation may reference outstanding loan/book value, prescribe applying the periodic reduction to original price, and adjust for whether the original buyer availed input tax credit.