GST on sale of old and used car
cs.aashishjain1014@gmail.com (3 Points)
23 September 2020The said notification provides that the taxable value shall be the difference between Sale consideration (minus) depreciated value of such goods on the date of supply.
Say for example: The cost of the car was Rs. 3 Lakhs on which GST @ 28% & Cess @ 1% was levied. The total cost of the car with GST taxes was Rs. 3,87,000/-. Apart from these, various other charges such as road tax, insurance, warranty etc., was charged, value of which say was Rs. 1,00,000/-. The total cost of the car is Rs. 4,87,000.
So, there are three value (i) Rs. 3 Lakhs which is the price of the car (ii) Rs. 3,87,000/- which is the price with GST and (iii) Rs. 4,87,000/- which is the price of car + GST + other charges.
The company would obviously capitalize the value as 4,87,000/- in the books and claimed depreciation under Income Tax on the said amount.
The Notification 8/2018 CTR uses the phrase depreciated value of such goods on the date of supply.
What does this phrase means. Should I calculate depreciated value of goods based on Rs. 3 Lakhs or Rs. 3.87 Lakhs or Rs. 4.87 Lakhs?