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treatment of sale of fixed assets

04 May 2018

what will be the treatment of sale of fixed assets ?? should I charge gst on invoice and what will be the impact on profit from it and it's treatment in income tax also ... ??

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4 Replies

Pankaj Rawat (GST Practitioner) (55062 Points)
Replied 04 May 2018

Other then vehicle , GST is applicable on transaction value (sale value)

profit will be trf to p&l account

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Ravi Sharma (78 Points)
Replied 04 May 2018

and if the fixed asset is vehicle ... and business is of transportation like services of buses from here and there like tour and travelling buses provider and a registered in gst ... want to sale his bus which is taken on plant and machinery account than what will be the treatment in GST and income tax ... because it is of capital nature

CA Naveen Chand (Chartered Accountant) (12739 Points)
Replied 04 May 2018

U CAN AVAIL INPUT ON CAPITAL GOODS AND ON BALANCE AMOUNT OF FIXED ASSETS DEPRECIATION CAN BE CLAIMED

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Pankaj Rawat (GST Practitioner) (55062 Points)
Replied 04 May 2018

Ravi ji

Below given only in case if the capital goods is purchase GST regime , otherwise follow the abive reply

plz go through below formula

As per Rule 44

Let us understand with an example:-
Assets used 4yr + 6monts 15 days which is count to be 4yrs+7months (months remaining 5month un used )
Purchasing Value of Assets is Rs 50,000 + 18% of GST is (9000) = Total Value of Asset is Rs 59,000, ITC Taken = Rs 9,000

Formula : ITC X months remain / 60

So ITC of balance useful life = 9000*5/60 = Rs 750 (Amount)

Let’s assume actual consideration amount is Rs 4000. Tax calculated = 4000*18% = Rs 720 (Tax Amount)

Now comparison of Amount and Tax i.e., Rs 750 and Rs 720 respectively. The amount is higher as compared to taxes. However, the registered person under GST will have to pay Rs 750 and should be furnished in GSTR- 1 Form. Therefore, it is necessary to prepared tax invoices in this case with invoice amounting Rs 4000 plus 750 is equal to Rs 4750. However, taxable value to be furnished in the invoice, as well as GSTR – 1 Form, will be Rs. 4167. (4167 × 18%=750)

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