No gst for negative margin of supply understanding

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This query is : Resolved

Bazeer Ahmed (Querist)

03 January 2019 Sir / Madam,

We are going to sell our company car which we have used 6 years for our office on which we have claimed depreciation till date in our books of account and as per IT act.

Date of Purchase was 18/09/2012

Purchase cost was Rs.1121830/-

WDV as on sale date is Rs.284933/- as per Companies Act 2013

WDV as per IT Act is Rs.112183/-

Sale Consideration is Rs.100000/-

Hence margin of supply is 100000-112183= (-)12183

Since margin of supply is negative, there will be no GST liability (i.e we can raise invoice for Rs.100000/- without GST)

Regarding this sale, we discuss with one consultant he told as the capital purchase has taken place in VAT era hence there would not be a GST sale. Whether his quote is right or wrong?

Kindly advise us whether our understanding is correct or not?

Thanks in advance,

with regards,
Bazeer L

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

03 January 2019 His quote is not right.
Since margin of supply is negative, there will be no GST liability (i.e we can raise invoice for Rs.100000/- without GST)

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