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Used car sales and purchase

AUDIT (FINANCE) (34 Points)

07 June 2019

Dear Friends and Experts,

Actually one of the my client doing the business of USED CAR SALES AND PURCHASE his total turnover above INR 2 crores. Now how to showing of Aggregate income to Income Tax and GST, I wanted to take total sales value or Sales - Purchase = Difference Value or Total Sales Please give the suggestions, Very Urgent

Thanks in Advance

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9 Replies

P. V. Kutty (Accounts) (308 Points)
Replied 07 June 2019

Depends upon billing pattern, If only brokerage charged, then his service charges are only reported.

2 Like

CA Raj Doshi (Practising CA) (8795 Points)
Replied 08 June 2019

If the amount is paid for purchase or sale of car from your client accounts ,then show as gross sales and gross purchase for such transactions.
And remaining transactions show as professional fee /commission depending on invoice /26AS.

rama krishnan (12234 Points)
Replied 08 June 2019

if he is acting as only commission agent then show the aggregate commission earned as income less expenses as your total income. if you are doing purchase and sales as business, show total sales value as your turnover. in either of the case, your accounts needs to be audited. difference of opinions invited and appreciated

AUDIT (FINANCE) (34 Points)
Replied 08 June 2019

How to treat GST because as per amendment provision of GST calculation as Sales - Purchase = Difference so, the GST Calculation on Difference value only @ 12% in this situation. How to treat income tax and GST

subhagan sreerangam (7039 Points)
Replied 09 June 2019

thanks

CA Raj Doshi (Practising CA) (8795 Points)
Replied 10 June 2019

In GST returns,you can mention taxable value which is different than invoice value. further your invoice value shall match with your sales turnover so no issue of GST reporting of turnover in Income tax return.

AUDIT (FINANCE) (34 Points)
Replied 18 June 2019

Mr. RAJ C DOSHI sir,

Please can you reply again in clearly with example

Kumar Sushank (General Manager - Finance) (1040 Points)
Replied 18 June 2019

As per GST : Sale - Purchase will be Taxable Value as well as Income in case of Used Cars Seller.

Suppose: Purchasing Car of Rs. 2 lacs & selling in Rs. 2.50 lacs then Taxable Value & Income will be 50,000/- only You can make reverse calculation also for GST & show that amount 50,000/- is GST inclusive.

Gross Profit will be Zero, Selling & Purchase Amount will be equal in Books & Difference will booked as income.

AUDIT (FINANCE) (34 Points)
Replied 18 June 2019

Originally posted by : Kumar Sushank
	As per GST : Sale - Purchase will be Taxable Value as well as Income in case of Used Cars Seller. Suppose: Purchasing Car of Rs. 2 lacs & selling in Rs. 2.50 lacs then Taxable Value & Income will be 50,000/- only You can make reverse calculation also for GST & show that amount 50,000/- is GST inclusive. Gross Profit will be Zero, Selling & Purchase Amount will be equal in Books & Difference will booked as income.

Sir, Actually my client doing the business of Old Cars Purchase and Sales Dealer. He is take hand loan from friends and relative to buy a used car and sale to customer, the margin only his income in the situation turnover is INR 2 crores as per bank statement. So, how to treat income tax and GST because We wanted report about GST Sale Value and GST Number also in ITR form. In this situation How to treat of income tax and GST.

Please give me sir right solution and avoid of scrutiny from income tax and GST