sir,
good morning
We are going to sell a used car to third party, we are not in the business of buying and selling of second hand motor vehicles.
whether we can pay GST under margin of supply scheme? or we have to pay gst on total consideration received??
margin of supply = book value after deduction of depreciation as per IT act under section 32 - consideration received. if margin is negative no need to pay GST.
note: We have not availed any input tax credit on those car.
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Sale of used car
Replies (3)
Quick Summary
Yes you have to pay GST on Sale of Second Hand Motor Vehicle. It's a Supply U/s 7 of the CGST Act 2017.
As per Explanation to Notification No. 8/2018 - Central Tax ( Rate ), dated 25th January 2018, in case of a registered person who has claimed Depreciation under section 32 of the Income-Tax Act,1961(43 of 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.
Therefore, you can pay GST under Margin of Supply scheme. And if the margin is negative, then you are not required to pay any GST.
Regards.
As per Explanation to Notification No. 8/2018 - Central Tax ( Rate ), dated 25th January 2018, in case of a registered person who has claimed Depreciation under section 32 of the Income-Tax Act,1961(43 of 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.
Therefore, you can pay GST under Margin of Supply scheme. And if the margin is negative, then you are not required to pay any GST.
Regards.
Thank you sir
Most Welcome Sir...
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