In a significant move, the Goods and Services Tax (GST) rate will be increased from 12% to 18% on the sale of all old and used vehicles, including Electric Vehicles (EVs), with certain exceptions. The new GST framework will apply to the sale of petrol vehicles with an engine capacity of 1200 cc or more and a length of 4000 mm or more, diesel vehicles with an engine capacity of 1500 cc or more and a length of 4000 mm, as well as SUVs.
It's important to note that GST will only be applicable to the margin of the supplier - that is, the difference between the purchase price and the selling price. If depreciation has been claimed, GST will be calculated on the depreciated value. The GST will not be applicable for unregistered persons involved in the transaction, ensuring that the tax applies only to registered sellers.
This GST hike has created some confusion in the industry, particularly among vehicle dealers and potential buyers, who are now grappling with the impact of these revised tax rates. As the vehicle market, including the growing segment of used EVs, faces these changes, further clarifications from authorities are anticipated to prevent misinterpretations.
Also Read: 55th GST Council Meeting: Key Highlights
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