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Sales old car

Anshuman Basu (account -GST) (1498 Points)

24 August 2021  
A Luxury car was purchased by a Registered Firm in 2014. The Firm has not claimed any input on the said purchase, because it was block credit U/s 17(5).

 Now, The Firm want to sell this car. Do The Firm need to charge GST on sale (Though The Firm have not claimed input at the time of purchases)? If yes, at what
rate do I need to charge GST?

In GSTR1 which column we show the Figure:


Sales value Rs.1,14,2306/-

WDV 1st August 2021 Rs.5,38,456/-

Margin Value Rs 6,03,850/-

 9 Replies

Rajendra Prasad (Employee Private) (530 Points)
Replied 24 August 2021

As per the Notification No 8/2018- Central Tax Rate has to pay Tax on the margin. Go through the notification for application Rate of GST as per HSN code.

CA Altamush Zafar (GST Consultant) (10953 Points)
Replied 24 August 2021

The GST rate is 18%.

Value to be taken as if sale value is less than WDV then value of supply is 0 therefore no tax. If sale value is more than WDV then value is the difference and rate is 18% as mentioned above.

Chain to Help (35 Points)
Replied 24 August 2021

Correct Zafar

The GST rate is 18%.

Value to be taken as if sale value is less than WDV then value of supply is 0 therefore no tax. If sale value is more than WDV then value is the difference and rate is 18% as mentioned above.

Pankaj Rawat (GST Practitioner) (51634 Points)
Replied 25 August 2021

A per Notification 8/2018 CT (r)

Vehicle of Vat Regime Sold in GST Regime :
GST is applicable on Profit Margin (Sale-Puchase )

GST Rate 12 % & 18% is applicable as per CC engine of vehicle mentioned in Notification.
More then 1500 CC , leanth exceeding 4000 MM, GST is 18%

Else ,.. 12%

CS Abhishek Goyal (M Com FCS LLB M-AIMA ) (10302 Points)
Replied 26 August 2021

In my opinion it does not constitute supply under section 7(1) since sale of old car cannot be said to be in the course or furtherance of business unless the company is in itself engaged in the said business. Since sale is made for a consideration it is outside the purview of Schedule I. If business asset is sold as scrap then also it has to be seen whether it amounts to in the course or furtherance of business.

CA Altamush Zafar (GST Consultant) (10953 Points)
Replied 26 August 2021

The definition of business is not the same as it used to be. It is very wide now and covers almost every transaction of economic value.

1 Like

Anshuman Basu (account -GST) (1498 Points)
Replied 26 August 2021

if Vehicle purchase GST Regime Sold in GST Regime  then what is the rule?

 

CA Altamush Zafar (GST Consultant) (10953 Points)
Replied 26 August 2021

Then also gst applicable as explained in previous replies

Pankaj Rawat (GST Practitioner) (51634 Points)
Replied 01 September 2021

Dear Anshuman
Vehicle Purchased & Sold in GST Regime :

If ITC claim , then GST is on transaction Value
If ITC is not claim , then GST is on Profit Margin (Sale - Purchase)

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