Question ID :
36950
GST on sale of Used Car
A Firm is having Car under Fixed Assets in its books. It decides to sell used car to somebody. As Car selling is not its business,Whether it should charge GST on it
Posted by
Mahesh Kumar
on
Jan 27, 2019
Filed Under
GST
The term supply includes all forms of supply such as sale made or agreed to be made for a consideration, by a person in the course or furtherance of business. The term 'in the course of business' is a very term and would include any business transaction. Hence sale of used car, would be considered as an activity in the course of business.
Further as per Schedule II of the CGST Act,2017 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.
Refer Notification 8/2018-Central Tax (Rate) dt. 25.01.2018, which provides for payment of GST on sale of used car on the Margin
Posted by
Vikram Katariya on
Jan 27, 2019
Answer ID :
76229
Please refer CGST Rate Notification No 8/2018 Dt 25.01.2018 where in there was a separate method on calculation of GST. in short your required to pay gst depending on the size of the car on margin of supply. If you charge depreciation u/s 32 of income tax on car the margin of supplies is the deference between sale consideration and wdv of the car, if the deference is negative, it shall be ignored.
If you did not charge depreciation u/s 32 of the income tax, margin of supply is the deference between sale consideration and purchase cost, if the deference is negative it shall be ignored.
the above benefit is not available if you have utilised input tax credit either old or current law.
Posted by
M.V.V.S.Narayana on
Jan 28, 2019
Answer ID :
76254
Supply definition under GST law is inclusive and it includes all the activities except excluded as per Sch III and by way of any notification. As per my view, gst is applicable on car which was used in the business.
Posted by
Mahendra Kumar Bagrecha on
Feb 08, 2019