Sale of motorcar used for business

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This discussion clarifies the tax implications when selling a motorcar used for business. It explains that GST should generally not be paid on the sale of a fixed asset like a car, as capital gains tax may apply instead. The method for calculating capital gains depends on whether depreciation was claimed for IT purposes. If selling vehicles is your core business, GST on margins is applicable. You'll need to issue a tax invoice regardless of the buyer's GST registration status.

arvind r shah

arvind r shah (Querist)
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13 July 2020 Car sold to non gst person
On what tax to be charged sale minus dep as per it or per book? Whether to prepare tax invoice? How to show in Gstr 3b& gstr1?
If senerio sold to regular gst person what will be the position? Documantation in both case.

Gokul Sharma

Gokul Sharma (Expert)
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13 July 2020 GST Should NOT be paid.BECAUSE IT IS YOUR FIXED ASSET.
Capital Gain needs to be pay.

if it is your business to sale old vehicles then GST Applicable and to be pay on margins.

Lekhraj sood

Lekhraj sood (Expert)
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13 July 2020 Valuation of used car- If depn is claimed in IT, then sale value less WDV as per IT.
If depreciation not claimed in IT then sale vale less purchase value.
Rate of GST will be 18% and you have to raise the tax invoice irrespective of whether buyer is registered under GST or not.

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