Whether GST Application on the Second hand Sale of Machinery which had suffered Excise Duty is correct?
Capital Item machinery which was bought in the year of 2013 worth Rs.550 Lakhs and suffered Excise duty 14% & VAT. Thereby State-VAT was alone availed as input credit.
The same machinery has been sold in the month of August 2017 (during the GST period) for a depreciated value at Rs.325 Lakhs by the owner corporate company with 28% GST charges added.
Having had suffered excise duty in 2013, such machinery is liable to attract GST on the Profit on Sale of Asset (second sale value - book value of the asset) and certainly not on the second sale entire value. Is it a correct assessment?
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GST on the Second Sale of Machinery which was bought in 2013
Replies (1)
The GST is on supply of goods which may be 2nd hand. The value for the purpose of charging GST is to be determined in terms of section 15. In my view, in the absence of any other mechanism to value the 2nd hand goods for the purpose of tax, the transaction value is the correct value for charging tax. Therefore, the assessment seems to have been correctly done.
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