Sales of Old Car

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A registered firm purchased a luxury car in 2014 and did not claim input tax credit due to blocked credit provisions. The firm now intends to sell this car and is seeking clarification on whether GST needs to be charged on the sale. They also want to know the applicable GST rate and how to report the sale in GSTR1, especially considering the sale value, written-down value (WDV), and margin.

Anshuman Basu

Anshuman Basu (Querist)
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24 August 2021
A Luxury car was purchased by a Registered Firm in 2014. The Firm has not claimed any input on the said purchase, because it was block credit U/s 17(5).
Now, The Firm want to sell this car. Do The Firm need to charge GST on sale (Though The Firm have not claimed input at the time of purchases)? If yes, at what rate do I need to charge GST?
In GSTR1 which column we show the Figure:
Sales value Rs.1,14,2306/-
WDV 1st August 2021 Rs.5,38,456/-
Margin Value Rs 6,03,850/-

CA Altamush Zafar

CA Altamush Zafar (Expert)
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24 August 2021 The GST rate is 18%. Value to be taken as if sale value is less than WDV then value of supply is 0 therefore no tax. If sale value is more than WDV then value is the difference and rate is 18% as mentioned above.

Udaya Chandran

Udaya Chandran (Expert)
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25 August 2021 As per my opinion, GST shall be charged on the sale value to the purchaser, GST rate varies according to the HSN applicable to that car.

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