Old car sale

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Vinod Kumar (Querist)
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29 May 2019 Dear all Good Morning

Please confirm that if we sale old car and their wdv is Rs. 10,000/- and sale value Rs.20,000/-

how to calculate gst if

condition 1. Old car sale Value Rs.20,000/- @ 28% GST rate
Condtion 2. Old Car WDV Rs.10,000/- (- ) Old Car Sale Value Rs.20,000/- (=) Diffrence Rs. 10,000/- @ 28% GST rate

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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29 May 2019 18% GST applicable on difference 10,000.

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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29 May 2019 Notification No. 8/2018 – Central Tax (Rate) also provides the mechanism on which value GST shall be levied. In such cases, Value of Supply shall be the “Margin of Supply” on which GST shall be calculated in the manner prescribed in the said notification as mentioned below:

If Depreciation Claimed u/s 32 of Income Tax Act 1961:-
Where the depreciation has been claimed under section 32 of Income Tax Act 1961 on the said goods, Margin of Supply shall be difference between Sale consideration received for supply of such goods and depreciated value of such goods on the date of supply, and where the margin of such supply is negative, it shall be ignored.

In Other Case:-
Margin of Supply shall be the difference between the selling price and the purchase price and where such margin is negative, it shall be ignored.

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.

On the analysis of the said notification, it can be observed that there is no condition about the Date of Purchase of Motor Vehicle which is being sold as Old / Used Motor Vehicles.

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