Gst on selling of old car used for business purposes
This query is : Resolved
16 April 2019
Business of assessee is not selling of cars i.e. car is used for directors for business purpose.
As per income tax wdv of car is Rs. 162670/- as on 31.03.2018
As per roc/books wdv of car is Rs. 4530/- as on 31.03.2018
Car sold in July 2018 for Rs. 151000/-
Car purchased in 2011 for Rs. Around Rs. 5.44 lacs.
CAR IS OF PETROL AND 1197 CC
Whether in GST applicable on ?
Please guide,
As per income tax wdv of car is Rs. 162670/- as on 31.03.2018
As per roc/books wdv of car is Rs. 4530/- as on 31.03.2018
Car sold in July 2018 for Rs. 151000/-
Car purchased in 2011 for Rs. Around Rs. 5.44 lacs.
CAR IS OF PETROL AND 1197 CC
Whether in GST applicable on ?
Please guide,
16 April 2019
Yes , GST is applicable
Applicability :-
:-
section 7 (1) (d) of the CGST Act says that all activities listed in Schedule II shall also be termed as a “Supply”. Clause 4 (a) of schedule II says that if goods forming part of the assets of a business are transferred under the directions of the person carrying on the business so as no longer to form part of those assets, whether or not for a consideration, such transfer is also a supply of goods.
GST Rate :-
Government vide Notification No. 8/2018 Central Tax Rate , notified the GST Rate as 18% on Old and used, petrol Liquefied petroleum gases (LPG) or compressed natural gas (CNG) driven motor vehicles of engine capacity of 1200 cc or more and of length of 4000 mm or more.
Valuation :
-
Value on which GST at 18% rates to be calculated shall be Margin of Supply.
In case , depreciation under I Tax has been availed - Margin of supply shall be difference between Sale consideration and Written down Value and tax to be calculated on such Margin, and where the margin of such supply is negative, it shall be ignored.
In your case ( considering depreciation has been claimed under income Tax Act ) Margin of Safety ( 151000- 162670 ) is negative and it shall be ignored
Applicability :-
:-
section 7 (1) (d) of the CGST Act says that all activities listed in Schedule II shall also be termed as a “Supply”. Clause 4 (a) of schedule II says that if goods forming part of the assets of a business are transferred under the directions of the person carrying on the business so as no longer to form part of those assets, whether or not for a consideration, such transfer is also a supply of goods.
GST Rate :-
Government vide Notification No. 8/2018 Central Tax Rate , notified the GST Rate as 18% on Old and used, petrol Liquefied petroleum gases (LPG) or compressed natural gas (CNG) driven motor vehicles of engine capacity of 1200 cc or more and of length of 4000 mm or more.
Valuation :
-
Value on which GST at 18% rates to be calculated shall be Margin of Supply.
In case , depreciation under I Tax has been availed - Margin of supply shall be difference between Sale consideration and Written down Value and tax to be calculated on such Margin, and where the margin of such supply is negative, it shall be ignored.
In your case ( considering depreciation has been claimed under income Tax Act ) Margin of Safety ( 151000- 162670 ) is negative and it shall be ignored
16 April 2019
GST-12% on All Old and used Vehicles other than following
Old and used, petrol Liquefied petroleum gases (LPG) or compressed natural gas (CNG) driven motor vehicles of engine capacity of 1200 cc or more and of length of 4000 mm or more.
/ diesel driven motor vehicles of engine capacity of 1500 cc or more and of length of 4000 mm/
Old and used motor vehicles of engine capacity exceeding 1500 cc, popularly known as Sports Utility Vehicles (SUVs) including utility vehicles.
Old and used, petrol Liquefied petroleum gases (LPG) or compressed natural gas (CNG) driven motor vehicles of engine capacity of 1200 cc or more and of length of 4000 mm or more.
/ diesel driven motor vehicles of engine capacity of 1500 cc or more and of length of 4000 mm/
Old and used motor vehicles of engine capacity exceeding 1500 cc, popularly known as Sports Utility Vehicles (SUVs) including utility vehicles.
16 April 2019
In case, depreciation under I Tax has not been availed
: Margin of Supply shall be difference between sale price and purchase price Tax to be calculated on such Margin, and where the margin of such supply is negative, it shall be ignored;
: Margin of Supply shall be difference between sale price and purchase price Tax to be calculated on such Margin, and where the margin of such supply is negative, it shall be ignored;
17 April 2019
Respected Madam,
Another CA sir at another forum, viewed like this:
Gst on selling of old car used for business purposes
Yes you will have to pay GST as per schedule II of cgst act and it shall be paid at 18% on the margin amount i.e. sale value less wdv as per books.
Please guide again,
Thanks with regards,
Another CA sir at another forum, viewed like this:
Gst on selling of old car used for business purposes
Yes you will have to pay GST as per schedule II of cgst act and it shall be paid at 18% on the margin amount i.e. sale value less wdv as per books.
Please guide again,
Thanks with regards,
17 April 2019
Explanation –For the purposes of notification No.8/2018 ( Central Tax ) dt 25 Jan 2018 :-
(i) in case of a registered person who has claimed depreciation under section 32 of the Income-Tax Act,1961(43 of 1961) on the said goods, the value that represents the margin of the supplier shall be the difference between the consideration received for supply of such goods and the depreciated value of such goods on the date of supply, and where the margin of such supply is negative, it shall be ignored;
GST will be on the value that represent margin of the supplier, on supply of such goods.
(i) in case of a registered person who has claimed depreciation under section 32 of the Income-Tax Act,1961(43 of 1961) on the said goods, the value that represents the margin of the supplier shall be the difference between the consideration received for supply of such goods and the depreciated value of such goods on the date of supply, and where the margin of such supply is negative, it shall be ignored;
GST will be on the value that represent margin of the supplier, on supply of such goods.
17 April 2019
Its not specified in the notification , whether depreciated value will be as per IT or as per Books .
Another CA in another Forum may also be considered as right .
Its a matter of interpretation . Clarification awaited from Authorities
Another CA in another Forum may also be considered as right .
Its a matter of interpretation . Clarification awaited from Authorities
17 April 2019
Respected Madam,
Please guide clearly whether wdv should be as per books(roc) or as per Income tax so that in future one should not be held liable for interest and penalties and at the same time, one should not pay which does not required to be paid.
Thanks with regards for taking interest in my problem.
Please guide clearly whether wdv should be as per books(roc) or as per Income tax so that in future one should not be held liable for interest and penalties and at the same time, one should not pay which does not required to be paid.
Thanks with regards for taking interest in my problem.
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