GST ON SALE PURCHASE OF OLD TRACTOR
This query is : Resolved
08 October 2017
is there gst applicable on sale purchase of old tractor
08 October 2017
yes it is applicable @ 18%
09 October 2017
which hsn code
09 October 2017
new tractor gst rate 12%
27 July 2024
### GST on Sale and Purchase of Old Tractors
**1. **GST Applicability:**
**A. **Sale of Old Tractors:**
- **Taxability:** The sale of used or old tractors is subject to GST, but the applicable rate and conditions are specific.
- **Condition of Tractor:** If the old tractor is sold as a used vehicle, the sale will generally be taxed at **12% GST** under the category of "motor vehicles" because used motor vehicles fall under this rate.
**B. **Purchase of Old Tractors:**
- **Input Tax Credit (ITC):** The buyer of a used tractor can generally claim ITC only if the tractor is purchased for use in business or as an input for further supplies and if the transaction complies with the conditions for claiming ITC.
### **2. **HSN Code for Old Tractors**
**A. **HSN Code:**
- **HSN Code for Motor Vehicles:** For old tractors, the relevant HSN code is:
- **HSN Code 8701:** This code covers “Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 87.02), including station wagons and racing cars.”
**B. **Specific Code for Tractors:**
- **HSN Code 8701** can be used for tractors as well. For precise HSN codes and classification, it’s always good to check the latest GST tariff or consult a GST professional.
### **3. **Compliance and Documentation**
**A. **Invoice and Reporting:**
- **GST Invoice:** When selling an old tractor, ensure to issue a GST-compliant invoice, mentioning the GST rate (12%) and the HSN code.
- **Reporting:** The sale should be reported in GSTR-1, and the GST collected should be paid through GSTR-3B.
**B. **ITC on Purchase:**
- **Claiming ITC:** If the tractor is purchased for business use, you can claim ITC on GST paid on the purchase. Ensure that the purchase is supported by a valid GST invoice and all necessary documentation is maintained.
### **Summary**
1. **GST on Old Tractors:** The sale of old tractors is taxable at 12% GST.
2. **HSN Code:** Use **HSN Code 8701** for old tractors.
3. **Compliance:** Issue GST-compliant invoices and report transactions in GST returns. ITC can be claimed if conditions are met.
### **References**
- **Notification No. 1/2017-Central Tax (Rate):** Provides details on GST rates applicable to motor vehicles.
- **HSN Code 8701:** Covers motor vehicles including tractors.
For accurate guidance and to ensure compliance with current regulations, consulting with a GST professional or tax advisor is recommended.
**1. **GST Applicability:**
**A. **Sale of Old Tractors:**
- **Taxability:** The sale of used or old tractors is subject to GST, but the applicable rate and conditions are specific.
- **Condition of Tractor:** If the old tractor is sold as a used vehicle, the sale will generally be taxed at **12% GST** under the category of "motor vehicles" because used motor vehicles fall under this rate.
**B. **Purchase of Old Tractors:**
- **Input Tax Credit (ITC):** The buyer of a used tractor can generally claim ITC only if the tractor is purchased for use in business or as an input for further supplies and if the transaction complies with the conditions for claiming ITC.
### **2. **HSN Code for Old Tractors**
**A. **HSN Code:**
- **HSN Code for Motor Vehicles:** For old tractors, the relevant HSN code is:
- **HSN Code 8701:** This code covers “Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 87.02), including station wagons and racing cars.”
**B. **Specific Code for Tractors:**
- **HSN Code 8701** can be used for tractors as well. For precise HSN codes and classification, it’s always good to check the latest GST tariff or consult a GST professional.
### **3. **Compliance and Documentation**
**A. **Invoice and Reporting:**
- **GST Invoice:** When selling an old tractor, ensure to issue a GST-compliant invoice, mentioning the GST rate (12%) and the HSN code.
- **Reporting:** The sale should be reported in GSTR-1, and the GST collected should be paid through GSTR-3B.
**B. **ITC on Purchase:**
- **Claiming ITC:** If the tractor is purchased for business use, you can claim ITC on GST paid on the purchase. Ensure that the purchase is supported by a valid GST invoice and all necessary documentation is maintained.
### **Summary**
1. **GST on Old Tractors:** The sale of old tractors is taxable at 12% GST.
2. **HSN Code:** Use **HSN Code 8701** for old tractors.
3. **Compliance:** Issue GST-compliant invoices and report transactions in GST returns. ITC can be claimed if conditions are met.
### **References**
- **Notification No. 1/2017-Central Tax (Rate):** Provides details on GST rates applicable to motor vehicles.
- **HSN Code 8701:** Covers motor vehicles including tractors.
For accurate guidance and to ensure compliance with current regulations, consulting with a GST professional or tax advisor is recommended.
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