Used Car Sale / Purchase

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satender

non

88 Points Posted on 25 March 2023

Hi
We have buy a used Car from Register dealer to our Company Name. And we also are register in GST. And for that transaction He has issued us a Invoice without Tax.

So please advise that Tax should be charged on that Invoice or not.

Or Is it that Used cars are not eligible for GST.

What is the exact rules for the. Please advise.

Thanks In Advance.

Replies (3)

Quick Summary

This discussion clarifies GST applicability on used car purchases made by a company from a registered dealer. While used cars are generally subject to GST when sold in the course of business, specific rules apply. If the dealer opted for the margin scheme (Rule 32(5)), GST is only charged on the profit, not the full transaction value, especially if the selling price is less than the buying price and no prior GST was claimed. It's crucial to ensure the invoice correctly reflects the applicable tax.

Sahil Ahuja

Accountant

57 Points Posted on 25 March 2023

Refer rule 32(5). if selling price is less than buying price and no gst is availed at time of buying CG, value as per section 15 of CGST act will be 0 and no gst applicable.

Pankaj Rawat

GST Practitioner

29904 Points Posted on 26 March 2023

Yea agree with Mr. Sahil Ahuja , as per Rule 32(5)the person deals in 2nd hand is has 2 option exercise towards the payment of GST.
1. NO ITC & GST ON MARGIN (PROFIT)
2. WITH ITC & GST ON TRANSACTION VALUE.

so might have choosed 1St option.

can refer :

https://youtu.be/fg7V_dFWm98

https://youtu.be/tdTP7trj-5g

WillBeasley

CEO

22 Points Posted on 10 August 2023

Congratulations on your recent used car purchase for your company! Regarding the tax situation, it's essential to consider a few factors. Used cars are indeed subject to GST under certain conditions. According to the GST rules, if the seller is a registered dealer and the supply of the used car is in the course of business, then GST is applicable.
In your case, if the transaction involves a registered dealer and is a business-related purchase, GST should be charged on the invoice. It's always a good practice to ensure that the invoice reflects the correct tax amount to maintain compliance.
Also, if you ever want to move your car, consider using car relocation services. This can be especially helpful if your company needs to move vehicles between locations efficiently.