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Used Car Sale / Purchase

satender (non) (125 Points)

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.

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3 Replies

Sahil Ahuja (Accountant) (75 Points)
Replied 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.

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Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 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)
Replied 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.