Old Ginning machinery purchase
This query is : Resolved
19 September 2024
Dear sir, my question is we purchased old ginning machinery from unregistered person and issued urd purchase bill... After few days we sold this machinery in bill to registered tax payer on 18% gst.....
Is this correct? Kindly clarify
Is this correct? Kindly clarify
12 August 2025
Thanks for your question!
Here’s the clarification on your situation with old ginning machinery:
1. Purchase of Old Machinery from Unregistered Person
Since the supplier is unregistered, they cannot charge GST or issue a tax invoice.
You have done a URD (Unregistered Dealer) purchase bill which is okay as a documentary evidence of purchase.
2. Input Tax Credit (ITC) on Such Purchase
You cannot claim ITC on purchases from unregistered persons.
If the machinery was bought for business use and GST was paid on subsequent sale, no ITC on purchase side.
3. Sale of Machinery to Registered Dealer with GST @18%
When you sell old machinery to a registered person, you need to charge GST on the transaction value at the applicable rate (18% in your case).
Your invoice to registered buyer should have GST @18%.
4. Is This Correct?
Yes, it is correct to charge GST at 18% on sale of machinery to registered buyer.
The purchase from unregistered person does not impact your liability to charge GST on sale.
The sale is treated as supply under GST, so you must charge GST regardless of your purchase source.
5. Additional Points
Make sure to keep proper documentation of the sale invoice with GST details.
You are responsible for charging and depositing GST on the sale.
You cannot claim ITC on your purchase from unregistered supplier, but can pay GST on sale and claim ITC on other eligible inputs.
Here’s the clarification on your situation with old ginning machinery:
1. Purchase of Old Machinery from Unregistered Person
Since the supplier is unregistered, they cannot charge GST or issue a tax invoice.
You have done a URD (Unregistered Dealer) purchase bill which is okay as a documentary evidence of purchase.
2. Input Tax Credit (ITC) on Such Purchase
You cannot claim ITC on purchases from unregistered persons.
If the machinery was bought for business use and GST was paid on subsequent sale, no ITC on purchase side.
3. Sale of Machinery to Registered Dealer with GST @18%
When you sell old machinery to a registered person, you need to charge GST on the transaction value at the applicable rate (18% in your case).
Your invoice to registered buyer should have GST @18%.
4. Is This Correct?
Yes, it is correct to charge GST at 18% on sale of machinery to registered buyer.
The purchase from unregistered person does not impact your liability to charge GST on sale.
The sale is treated as supply under GST, so you must charge GST regardless of your purchase source.
5. Additional Points
Make sure to keep proper documentation of the sale invoice with GST details.
You are responsible for charging and depositing GST on the sale.
You cannot claim ITC on your purchase from unregistered supplier, but can pay GST on sale and claim ITC on other eligible inputs.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Refund Annexure-B
- Liable to deduct tds and 44ADA
- Sale of Equity shares for Purchase of Residential Property
- Nomination of Bank for refund in itr 2
- Section 56(2) of the Income tax Act 1961 , Gift to relative .
- ECO SUPPLY REPORTIONG IN GSTR-1
- Is Interest applicable for payment made through credit ledger vide DRC03 for FY 2020-21 & 2021-22
- CCFS 2026 Schemed
- Subscription paid to foreign customer
- Two seprate Invoice needed
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
