Used car business

I assume by used you mean you do sale/purchase on second hand items,

According to Rule 6(5) of the determination of the value rules in GST if a person deals in second hand goods on which ITC then the value shall be computed between difference between the selling price than purchase price and where such values negative it shall be ignored. Thus tax shall be levied on positive margins on you at 18% and yes this is also in case where the person you bought from doesn’t pays GST.