Fixed assets Sale Invoice

This query is : Resolved

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When selling a car previously classified as a fixed asset and depreciated, you must issue a GST sales invoice. GST is calculated on the profit margin (sale price minus the car's written-down value), not the full sale price. Ensure you use the correct HSN code and report the sale as a taxable outward supply of capital goods in your GSTR-1. Remember to reverse any input tax credit claimed on the car's purchase if applicable.

Sandeep Jain

Sandeep Jain (Querist)
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25 September 2025 Dear Sir,

We have A four Wheeler ( car) in books of account under Fixed Assets previous 3 years every year we have claimed depericiation on Car. Now we want to Sale but Customer ask to give us Sales Invoice with GST. so please suggest how i can issue GST invoice because its under Fixed assets not under Stock item. We are using Busy Software Please suggest

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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25 September 2025 A GST-registered business selling a car (held as a fixed asset and on which depreciation has been claimed) must issue a GST tax invoice for the sale, even though the car is not classified as stock. The GST is levied on the margin amount—i.e., only if the sale price exceeds the depreciated (book) value or “written down value” (WDV) of the car as per the books.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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25 September 2025 GST Invoice Process for Fixed Asset (Car) Sale
Prepare a GST sale invoice with the customer details just as for any supply of goods.

Use the car’s HSN (Harmonized System of Nomenclature) code for a motor vehicle and describe the car details.

The taxable value is the margin: Sale Price minus WDV (after charging depreciation).

GST at 18% (standard rate from January 2025) is applicable on this margin, not the gross sale value, if sale price > WDV.

If sale price is lower than WDV, GST is not payable.

Show this sale in GSTR-1 under “taxable outward supply of capital goods”.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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25 September 2025 How to Show in Books and GST Returns
Reduce the fixed asset amount by the sale value and charge depreciation till the date of sale.

Report in GSTR-1 as a taxable supply (select “B2B” or “B2C” as applicable).

If Input Tax Credit (ITC) was claimed on purchase, reverse proportionate ITC for remaining useful life as per GST Rules.

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