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Old car sale

sona1 (MANAGER) (359 Points)

03 December 2020

In year 2009 we were purchase a Marti car with our company name Value Rs. 3.80 Lac (app) after Depreciation for the year 2009 to 2020 Book Value comes in Till date (Nov,20) Rs. 0.63 Lac (app) .This current month i.e Dec,20 we sale this car to a UNREGISTER DEALER IN GST (With in State) ) value Rs. 0.60 Lac (app) with Invoice , So as per IT act we have loss on sale 0.03 Lac (app) against Maruti car & as per our car dealer advise we have not charge any GST against this Invoice because loss sale car not charge any gst as per gst act they are said

Please advise how we show this Invoice in GSTR 1 Return….

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6 Replies

Shivam RC (Student) (23683 Points)
Replied 03 December 2020

As per Notification No. 8/2018 - Central Tax ( Rate ), dated 25th January 2018, GST is levied on the MARGIN AMOUNT ( Sale Value - WDV ), where the person has availed the benefit of Depreciation U/s 32 of the Income Tax Act 1961. But if the Margin Amount is "NEGATIVE ( i.e. Loss )", then NO GST shall be applicable on the sale consideration.

Since in your case there is a loss of Rs. 3,000 ( Negative Margin ), so No GST shall be applicable on this transaction.

As far as reporting of this transaction in FORM GSTR-1 is concerned, you can report it under Table No. 8 [ Nil-rated, Exempt and Non-GST Outward Supplies ], of Column No. 8D [ Intra-State Supplies to Unregistered Persons ].

This is my personal advise. Also consult and take advise from other members of the forum before taking the final decision.

Regards,
Shivam RC.

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Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 07 December 2020

Not required to pay GST.

CA Akshay Hiregange (Partner - Audit & Assistance) (4515 Points)
Replied 07 December 2020

Agreed that GST is not applicable on the negative margin.

Although this supply is not an exempt/nil rated supply under GST. The taxable value in NIL and not the tax rate. Therefore, this need not be disclosed in GSTR 1/3B in my view.

This also means no ITC requires to be reversed under Rule 42 /43 of GST law.

This may arise as a variance which filing GSTR 9C (Financial Statements Vs GSTR 9), suitable disclosure could be made.

sampat (accountant) (89 Points)
Replied 07 January 2021

Dear sir,
we obtain AA from dgft for 350 kgs raw materials also we impot 250 kgs against the same AA through NHAVA sheva custom house.
sir now we want import from local suppliers so kindly let me know how and what is process for obtain the Non Utilized certificates from custom and what is the process for the same in DGFT.