Sale of Fixed Assets Which was Purchases Pre GST Era

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This discussion clarifies GST applicability on the sale of a concrete mixer truck purchased before the GST era. Since no VAT credit was claimed, GST is applicable on the sale. The margin scheme, as per Notification No. 8/2018, is relevant for valuation. GST is payable on the difference between the selling price and the written-down value (or purchase price if no depreciation was claimed). If the sale price equals the book's written-down value, no GST is levied, and a Bill of Supply can be issued, with no impact on GSTR 3B and GSTR 1.

Kelvin Bhuva

Kelvin Bhuva (Querist)

19 February 2020 A person who is engaged in business of construction he bought Concrete Mixer Truck in 2012 and not taken VAT credit on it. he want to sell it and he will receiver consideration for it. so my question is first of all GST will be applicable or not? If yes then How to determine value of it under GST?

CA Anita Bhadra

CA Anita Bhadra (Expert)

19 February 2020 GST is applicable @ 18% .
Since Assets purchase pre-GST regime and you have not claimed credit. ITC reversal clause is not applicable.
For valuation, Margin Scheme is relevant:-
The scheme is made applicable to all taxpayers on the sale of the motor vehicle held as a capital
asset. Vide Notification No. 8/2018 – Central Tax (Rate) dated 25 Jan 2018. In this regard, GST
has to be paid on the excess of selling price over the written down value as per the Income Tax Act,
1961, where depreciation has been claimed by the taxpayer. Where no depreciation has been
claimed, GST shall be paid on the difference in the selling price and the purchase price. The value will be consideration received

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Kelvin Bhuva

Kelvin Bhuva (Querist)

19 February 2020 Thanks For your Reply. We are selling it at written down value of books and will receive same amount as consideration. So No GST will be levied right? So can we raise Bill of supply? and how does it affect on GSTR 3B and GSTR 1?

CA Anita Bhadra

CA Anita Bhadra (Expert)

19 February 2020 You can raise the bill of supply. In my view, if GST is not applicable to sale of Asset, GSTR 3B and GSTR 1 should not be affected.

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