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gst for sale of car

JOSEPH MATHEW (MANAGER ACCOUNTS) (123 Points)

30 December 2018

in case of sale of car what should be the gst percentage and on what amount should it be raised.

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4 Replies

Gourav Garg (6 Points)
Replied 30 December 2018

In case , the person is registered person and he has taken ITC on car , then the rate of GST is same as in the new car.

In case the person has claimed depreciation on the value of car (5 years, 20% each year).... if he has sold car before 5 years , then he has to proportionately apply GST(as same amount of depreciation claimed on the amount of GST ).

In case of unregistered person selling the car , he has nothing to do with GST .

In case of sale of car as scrap (after 5 years) , rate of GST shall be such ,as is applicable in case of sale of Scrap .

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Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 30 December 2018

As per Notification 8/2018 CT (r)

Vehicle of Vat Regime Sold in GST Regime :
GST is applicable on Profit Margin (Sale-Puchase )

Vehicle Purchased & Sold in GST Regime :

If ITC claim , then GST is on transaction Value
If ITC is not claim , then GST is on Profit Margin (Sale - Purchase)

GST Rate 12 % & 18% is applicable as per CC engine of vehicle mentioned in Notification.

More then 1500 CC , leanth exceeding 4000 MM, GST is 18%

Else ,.. 12%

Note : If URD selling his personal car No GST attract

1 Like

pritesh (CA Final student) (7101 Points)
Replied 30 December 2018

agreed with as pankaj sir said.

CA Abhilash N (Chartered Accountant) (265 Points)
Replied 31 December 2018

Case 1: In case of sale of old and used motor vehicle where input tax credit has not been availed on purchase of such motor vehicle:

Tax to be discharge on margin (i.e. Sale price – Purchase price), if negative no GST to be paid.

Notification no. 8/2018-Central Tax (Rate) dated 25th January 2018

GST rate on sale of old and used motor vehicles

Category	Rate
Old and used, petrol engine >=1200cc and length >=4000mm	18%
Old and used, diesel engine >=1500cc and length >=4000mm	18%
SUV (Length >4000mm, Ground clearance >170mm, engine >1500cc)	18%
Other than above	12%

Conditions:

Input tax credit should not have been availed on purchase of such vehicle.
Sale of such vehicles on or after 25/1/2018. Notification no. 1/2018-Compensation Cess (Rate) dated 25th January 2018.

Notification no. 1/2018-Compensation Cess (Rate) dated 25th January 2018

No compensation cess to be paid on sale of old and used motor vehicles.

Case 2: In case of sale of new motor vehicle or in case of sale of old and used motor vehicle where input tax credit has been availed on purchase of such motor vehicle:

GST to be discharged on transaction value (i.e. sale price) at the rate of 28%.

Compensation cess to be discharged based on notification no. 1/2017-Compensation Cess (Rate) dated 28th June 2017 as amended by notification no. 5/2017 Compensation Cess (Rate) dated 11th September 2017.