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GST Applicability

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Malagouda Patil

3 Points Posted on 22 November 2020

One of my client has Business of Car Reselling. Is Car Reseller has to be get registered under the GST Act ? If Gst Applicable which HSN Code he should use? Rate of Gst? Any Clarification on reseller?

Replies (3)

Quick Summary

This discussion clarifies GST applicability for car resellers. If your aggregate turnover exceeds the threshold, GST registration is mandatory. For second-hand goods like cars, where no input tax credit was claimed on purchase, GST is applied to the difference between the selling and purchase price as per Rule 32(5) of the CGST Rules, 2017. The relevant HSN code will be that of the car itself.

Pankaj Rawat

GST Practitioner

55067 Points Posted on 22 November 2020

As per Rule 32(5) of the CGST Rules, 2017, where a taxable supply is provided by a person dealing in buying and selling of second hand goods i.e., used goods as such or after such minor processing which does not change the nature of the goods and where no input tax credit has been availed on the purchase of such goods, the value of supply shall be the difference between the selling price and the purchase price and where the value of such supply is negative, it shall be ignored

So if your aggregate turnover exceeds as prescribed in section 22 of CGST Act , you are required to obtain Registration.

The HSN Code will be the same the goods(car) you are dealing.