TaxTMI 
TaxTMI 
2021 (10) TMI 1120
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....t, seeking an advance ruling in respect of the following questions. 1. How to calculate margin on sale of second hand goods? Whether A) Margin = Sales price - Purchase price OR B) Margin = Sales price - (Purchase price + Processing cost) For ex: We purchased a second hand car for Rs. 10, 00,000/-. Incurred minor processing cost of Rs. 50,000/- and sold the car for Rs. 12, 00,000/-. In this case whether margin will be Rs. 2,00,000/- (12,00,000-10,00,000) or Rs. 1,50,000/- (12,00,000-[10,00,000 + 50,000])? If B is correct we cannot claim Input Tax Credit on processing cost incurred but if A is correct can we claim Input Tax Credit on processing cost incurred? 2) Whether tax is to be calculated on margin or the margin is i....
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....d goods are sold. Applicant does not claim Input tax credit on purchase of second hand goods and has opted for Margin Scheme and applies GST rate as per Notification No 8/2018- Central Tax (Rate) dt 25/01/2018. 2.2 Margin on sale of second hand goods is as under:- MARGIN = Sales price - (Purchase price + Processing cost) Applicant cannot claim Input Tax Credit on second hand goods purchased and on processing cost incurred. 2.3 Margin is inclusive of tax. 2.4 Applicant can claim Input Tax Credit on indirect expenses incurred, such as rent, commission, professional fees, telephone etc. for the purpose of business. 2.5 If the total margin for F.Y. 2019-20 is below Rs. 1.5 crores whether applicant can opt for composition....
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....selling price).The Rule 32(5) of the CGST Rules only provides the amount on which tax is to be discharged. Thus, for the purpose of aggregate turnover selling price is to be considered and if it is more than 1.5 crores the applicant cannot opt for composition scheme. 04. HEARING 4.1 Preliminary e-hearing in the matter was held on 04.02.2021. Shri. Arun Josh', CA, the Authorized representative of applicant was present and made submissions in support of admission of the subject application. Jurisdictional Officer Smt. Firdaus Pagarkar, Assistant Commissioner of CGST, Division-I, Pune-2 was also present. 4.2 The application was admitted and called for final e-hearing on 12.10.2021. Shri Shubham Sarda, CA, appeared and made oral su....
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.... hereby exempts the central tax on intra-state supplies of goods, the description of which is specified in column (3) of the Table below, falling under the tariff item, sub-heading, heading or Chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), as are given in corresponding entry in column (2), from so much tax as specified in Schedule IV of Notification No. 1/2017 - Central Tax (Rate), as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4), of the said Table, on the value that represent margin of the supplier, on supply of such goods Sr. No. Chapter Heading, Sub-Heading or Tariff Item Description of Goods Rate 1 8703 Old and used, pet....
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....and where the margin of such supply is negative, it shall be ignored; and (ii) in any other case, the value that represents the margin of supplier shall be, the difference between the selling price and the purchase price and where such margin is negative, it shall be ignored. 2. This notification shall not apply, if the supplier of such goods has availed input tax credit as defined in clause (63) of section 2 of the Central Goods and Services Tax Act, 2017, CENVAT as defined in CENVAT Credit Rules, 2004 or the input tax credit of Value Added Tax or any other taxes paid, on such goods. 5.6 From a reading of the said notification it is seen that the concessional rate under the notification shall not apply, if the supplier....