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Sale of Car shown in Balance sheet

Khadija (Student) (123 Points)

26 February 2020

Our is a proprietorship firm. We have car as opening wdv as on 1-4-19 Rs. 200350/-.

It is purchased in year 2000.

We want to sell it at Rs.175000/-

Is GST applicable??

We have not taken Vat credit at the time of purchase.

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8 Replies

sabyasachi mukherjee (26183 Points)
Replied 26 February 2020

Are u selling your car to an agency who has a gst number.
If yes then you can apply gst.
Vat credit no way now, you cannot take since it is purchased in the year 2000.

SOHAN LAL (Manger Accounts & Finance) (363 Points)
Replied 26 February 2020

If sell value less than WDV than GST is exempt. GST applicable only Profit amount.

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Khadija (Student) (123 Points)
Replied 26 February 2020

I am selling to a unregistered person.

I am a registered person

SOHAN LAL (Manger Accounts & Finance) (363 Points)
Replied 26 February 2020

No issue

RAJA P M ("Do the Right Thing...!!!") (127264 Points)
Replied 26 February 2020

GST not applicable if sale values less than the book (WDV) value...

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Kapadia Pravin (17249 Points)
Replied 27 February 2020

A car which is a part of the business assets of the company as the same is capitalized in the books, if transferred, then vide section 7 (1) (d) read with Schedule II clause 4 (a) of the said Act shall be termed as a “Supply” and vide section 9 shall be a taxable supply.

Further, as the transaction being termed as supply vide clause (d) of sub section (1) of section 7, the condition of supply made for a consideration and for furtherance of business is not applicable for the supplies defined under Section 7(1)(d) of CGST Act.

Therefore, selling of car lying in the fixed assets of a registered person will be a taxable supply.

In case of a registered person who has claimed depreciation under section 32 of the Income-Tax Act,1961 on the said goods, the value that represents the margin of the supplier shall be the difference between the consideration received for supply of such goods and the depreciated value of such goods on the date of supply, and where the margin of such supply is negative, it shall be ignored.

3. In any other case, the value that represents the margin of supplier shall be, the difference between the selling price and the purchase price and where such margin is negative, it shall be ignored.

In Nutshell, GST is exigible on sale of motor vehicle at 18% rates on the margin defined as above.

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