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GST on sale of used machinery

14 July 2018

I am a manufacturer of goods. I want to sale some of my used machinery (capital goods) on which I have not taken input credit at the time of purchase. Please suggest GST treatment on such sale.
Should I pay GST on sale value less WDV?

Thanks.

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14 Replies

CA Naveen Chand (Chartered Accountant) (12729 Points)
Replied 14 July 2018

DISPOSAL OF MACHINE DOES NOT ATTRACT GST AT ALL AS IT IS NOT A ORDINERY PART OF BUSINESS

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RAJESH CHOUDHARY (5 Points)
Replied 14 July 2018

Thanks. could you please share the relevant section?

Regards- Rajesh

saurabh sawlani (2191 Points)
Replied 14 July 2018

No, if u can't take itc at the time of purchase, then u need not to pay gst at time of sale

R. CA (121 Points)
Replied 14 July 2018

GST should be paid on the sale value of machinery even if you didn't claim itc. As disposal of asset is supply under GST as per schedule II.

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Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 15 July 2018

‘Schedule II’ of CGST Act Para 4 (a), Activities to be considered a supply of Goods or Supply of Services

Where goods forming part of the assets of a business are transferred or disposed of by or 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 or disposal is a supply of goods by the person

So GST is applicable .

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Vinod Babu (24191 Points)
Replied 15 July 2018

Good explaination sir.............

RAJESH CHOUDHARY (5 Points)
Replied 15 July 2018

Thanks all.
Now it is clear that it is taxable. What will be taxable value, Sale value less WDV? or something else?

Regards

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 16 July 2018

Dear Rajesh

Sir if the machinery being purchased in Vat regime & sold in GST regime then the GST will be charge on sale /transaction value.
If it is purchase in GST regime & no ITC was claim then As per Schedule 1, it will not consider as supply , hence No GST will be applicable (As Mr. Naveen has replied)

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dheeraj (accountant) (25 Points)
Replied 05 December 2018

Hello Sir

I have some query please help

1. if the machinery purchased in vat regime and sold in gst regime and the input vat was claimed then:- what will be the taxable value.

2. if the machinery purchased in gst regime and sold in gst regime and the gst input is taken then: what will be the taxable value.

3. if the machinery purchased in gst regime and sold in gst regime and the gst input is not taken then: what will be the taxable value.

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 05 December 2018

1. gst on transaction value

2. gst applicable as per rule 44

3. no gst

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Amit Jain (Sr. Accounts Officer) (96 Points)
Replied 15 December 2018

Sir,

what will be transaction value if we sold machinery below book value for GST

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 15 December 2018

1. TRANSACTION VALUE

2.TRANSACTION VALUE

3.NO GST WILL APPLICABLE

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 15 December 2018

BELOW BOOK VALUE : STILL BE TRANSACTION VALUE , THE CONSIDERATION YOU RECED.

aditya (lawyer) (24 Points)
Replied 11 July 2019

Dear Sir,
i have gone throw from your explanantion on the sale of capital goods and i have related query:-
If a dealer has purchased a machinery during VAT regime and has planned to sold the machinery during Gst regime in the month of July 19.what shall be the complete procedure for selling the same ?