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Auction

Nitin Gupta (22 Points)

30 May 2018

Suppose I buy vehicle from auction conducted by SDM or any other court. Do I have to pay GST ?

If Yes, then at what rate ?

at auction price or at the factory price of that vehicle after cutting depreciation ?

I need rulings regarding the same and who are the authorities for such type of adjudication ? Please let me know.

Thanks for doing the needful.

Warm regards,

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5 Replies

Subhkaran Surana (343 Points)
Replied 30 May 2018

Reverse charge mechanism is applicable on notified goods as per section 9(3) of the CGST Act, 2017.
and
purchase of old motor vehicle from such govt dept is one such good.

The rate of GST would be 28% + cess.

Advance ruling can be obtained by making application in prescribed form on stipulated matters as per section 97 to Authority for Advance Ruling with fee of Rs 5000

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Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 30 May 2018

As proviso to Rule 32 (5) of the Central Goods and Services Tax Rule,2017 which says that in case of sale of repossessed goods from a defaulting borrower, who is not registered, the value of the output will be the difference between (a) actual sale price; or (b) depreciated purchase price, taking a depreciation of 5% per quarter or part thereof, from the date of purchase till disposal. The value of the output will be taken as nil, if (a) is less than (b).

Vinod Babu (24191 Points)
Replied 31 May 2018

Sir, Thanks for detailed information.

Nitin Gupta (22 Points)
Replied 01 June 2018

Dear Surain Sir,

As far as RCM (Reverse Charge Mechanism) is concerned, such principle is applicable only when u buy some goods from unregistered GST entity. What, if the purchaser by himself is also unregistered, then how will the tax be paid and in what manner ? Please let me know.

Thanks for your very useful suggestion.

Nitin Gupta (22 Points)
Replied 01 June 2018

Dear Pankaj ji,
I really appreciate Rule 32 (5) of the Central Goods and Services Tax Rule,2017 which says all about repossessed goods and other things.
The question is still standing what is the actual sale price and the method of determination of such sale price and in this case who will pay GST ?
Do you mean if SDM or Tehsildaar auction the vehicle below the market value also then also such price will be considered as actual sale price ?
I am looking for your response.
Warm regards,
Nitin Gupta