PURCHASE OF OLD BIKE

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A registered dealer is purchasing old bikes from individuals (B2C) using cash and then reselling them after repairs, with finance options available. The discussion clarifies whether GST applies to the sale of these old bikes, the applicable rate (18% on margin), and if the purchases from individuals count as URD (Unregistered Dealer) purchases. It also addresses potential non-compliance issues regarding cash payments exceeding Rs 10,000 for both the bike purchase and repair expenses, under GST and Income Tax laws.

Suresh S. Tejwani

Suresh S. Tejwani (Querist)

15 July 2023 OLD BIKE PURCHASED IN CASH FROM INDIVIDUAL BY DEALER AND PAID CONSIDERATION IN CASH.

NON COMPLIANCE ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

15 July 2023 Cash payment should not exceed Rs 10,000.

Suresh S. Tejwani

Suresh S. Tejwani (Querist)

15 July 2023 MR.A (registered person under GST) is purchases old bikes from direct customers(B2C) by settlement in cash only (usual trend in market).
and then he repairs & modifies bikes when necessary and sales it to direct customers(B2C) by giving option to avail finance from various small finance co.
MR.A receives settlement from Small finance co.
1. whether GST is applicable on sale of old bikes ? if, yes GST rate ?
2. whether old bikes purchased from B2C customers can be considered as URD purchase ?
in case , if repair & modification expenses paid to garage owner by cash - is their any non-compliance ? under GST or Income Tax act ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

16 July 2023 1 18% GST applicable on the margin amount that is difference between purchase price and selling price.
2 yes it's urd purchase.

Cash payment should not exceed 10,000.

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