Sale of used car

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BASKARAN (Querist)
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07 December 2018 Dear Experts,

Our company going the exchange our old car and by a new car from the same dealer.
Kindly clarify. to the following points .
We should raise a GST Invoice ?
If yes 18 % GST ?

CA Anita Bhadra

CA Anita Bhadra (Expert)
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07 December 2018 Government vide Notification No. 8/2018 Central Tax Rate , reduced the Rate of GST on old and used vehicle as follows:
1. GST-18% on following types of vehicles :-
on Old and used, petrol Liquefied petroleum gases (LPG) or compressed natural gas (CNG) driven motor vehicles of engine capacity of 1200 cc or more and of length of 4000 mm or more.
on Old and used, diesel driven motor vehicles of engine capacity of 1500 cc or more and of length of 4000 mm
on Old and used motor vehicles of engine capacity exceeding 1500 cc, popularly known as Sports Utility Vehicles (SUVs) including utility vehicles.

On all other All Old and used Vehicles - GST Rate will be 12%

Government also Exempted the Cess applicable on sale of Used vehicle through Notification No. 1/2018 Compensation Cess Rate..

Value on which GST at above rates to be calculated shall be Margin of Supply which is to be calculated in the manner as mentioned in Notification which is as indicated below :-

1. In Case Depreciation under Income Tax Act Availed: Margin of supply shall be difference between Sale consideration and Written down Value and tax to be calculated on such Margin, and where the margin of such supply is negative, it shall be ignored.
2. In other cases: Margin of Supply shall be difference between sale price and purchase price Tax to be calculated on such Margin, and where the margin of such supply is negative, it shall be ignored;

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