Company is selling old car which used to be used by directors. Is margin on which GST is to be levied to be calculated on Sales price less book value as per Companies Act, or Sales price less WDV as per Income Tax act. Depreciation has been claimed in Income Tax Return at Income Tax rates, and in books of accounts at Companies Act rates, so WDV for both is different. Thank you.
2 Replies
prasad Nilugal
( GST Practitioner & Accounts )
(14801 Points)
Replied 25 November 2020
As per Notification 8 / 2018 ( C.T) dated 25/1/2018 , you have consider Depreciation as per the Section 32 of the Income Tax act 1961 . Please refer notification on CBIC / GST web site .
Shivam RC
(Student)
(23683 Points)
Replied 25 November 2020
GST needs to be paid on the Margin Amount...
Margin = Sale Consideration - W.D.V of the Asset on the date of Sale [ if Depreciation U/s 32 of the Income Tax Act 1961 has been claimed ].
However if the Margin is "Negative", then no GST is applicable.
Refer Notification No. 8/2018 - Central Tax ( Rate ), dated 25th January 2018.
Margin = Sale Consideration - W.D.V of the Asset on the date of Sale [ if Depreciation U/s 32 of the Income Tax Act 1961 has been claimed ].
However if the Margin is "Negative", then no GST is applicable.
Refer Notification No. 8/2018 - Central Tax ( Rate ), dated 25th January 2018.
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