Sale of old car
This query is : Resolved
20 January 2018
Dear Sir,
We are manufacturing company, We have car in our company name, My query is we have puchase new car and sale the old car
Whether we have to pay the GST on Old car sale transaction under reverse charges
Please revert on the same.
We are manufacturing company, We have car in our company name, My query is we have puchase new car and sale the old car
Whether we have to pay the GST on Old car sale transaction under reverse charges
Please revert on the same.
20 January 2018
No need to pay GST on sale of old car under reverse charge.
17 February 2018
Dear Sir, Our tax consultant say we have to pay the GST @ 28% on sale of old car
17 February 2018
Dear Sir, Our tax consultant say we have to pay the GST @ 28% on sale of old car
22 July 2025
Here's the clarification on **GST on sale of old car by a company**:
---
### 1. **Is GST applicable on sale of old car by a business?**
* If the company **has claimed input tax credit (ITC) on the purchase of the car**, then the sale of that car is treated as a **supply** under GST, and GST **is applicable** on the sale price.
* GST on sale of used goods (including vehicles) is generally applicable if the seller is a registered dealer and has claimed ITC initially.
### 2. **At what rate?**
* For motor vehicles (not meant for further sale, but for business use), **GST rate is 18% (CGST+SGST) or 28% if luxury car**.
* The exact rate depends on type and category of vehicle sold.
### 3. **Reverse charge applicability**
* **Reverse charge is generally not applicable on sale of old cars by the registered supplier** (the company).
* The company is required to charge GST and pay it on their own.
### 4. **If no ITC was claimed earlier**
* If **no input credit was claimed** on the purchase of the car, the sale of used car may be exempt or not liable to GST.
* This exemption is subject to the specific state's GST laws and notifications.
---
### Conclusion:
* If your company claimed **ITC on the car purchase**, you **must charge GST (likely @28%) on sale** of old car and pay GST.
* **Reverse charge does not apply** here.
* Your tax consultant’s advice to pay GST @ 28% is likely correct if the car falls under luxury cars.
---
If you want, I can help you draft a GST invoice or entry for this sale. Would that help?
---
### 1. **Is GST applicable on sale of old car by a business?**
* If the company **has claimed input tax credit (ITC) on the purchase of the car**, then the sale of that car is treated as a **supply** under GST, and GST **is applicable** on the sale price.
* GST on sale of used goods (including vehicles) is generally applicable if the seller is a registered dealer and has claimed ITC initially.
### 2. **At what rate?**
* For motor vehicles (not meant for further sale, but for business use), **GST rate is 18% (CGST+SGST) or 28% if luxury car**.
* The exact rate depends on type and category of vehicle sold.
### 3. **Reverse charge applicability**
* **Reverse charge is generally not applicable on sale of old cars by the registered supplier** (the company).
* The company is required to charge GST and pay it on their own.
### 4. **If no ITC was claimed earlier**
* If **no input credit was claimed** on the purchase of the car, the sale of used car may be exempt or not liable to GST.
* This exemption is subject to the specific state's GST laws and notifications.
---
### Conclusion:
* If your company claimed **ITC on the car purchase**, you **must charge GST (likely @28%) on sale** of old car and pay GST.
* **Reverse charge does not apply** here.
* Your tax consultant’s advice to pay GST @ 28% is likely correct if the car falls under luxury cars.
---
If you want, I can help you draft a GST invoice or entry for this sale. Would that help?
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