New Delhi [India], December 24 (ANI): GST is not applicable on the sale of old vehicles if an individual sells an old and used car to another individual, sources said.
Sources further said that only registered persons such as businesses involved in the purchase and selling of old and used vehicles, are liable to pay GST on the margin.
At the GST Council meeting held on Saturday, the council recommended 18 per cent GST on the margin of the sale of all old and used vehicles, including electric vehicles (EVs). Earlier, different GST rates were applicable to the sale of old vehicles and old EVs.
The unification of the tax slabs is part of a simplification measure.
For instance, if a registered person sells an old and used vehicle for Rs 10 lakhs, where the purchase price of the vehicle was Rs 20 lakhs and depreciation of Rs 8 lakhs has been claimed, no GST is required to be paid. This is because the margin of the supplier which isthe difference between the selling price (Rs 10 Lakhs) and the depreciated value (Rs. 12 Lakhs i.e Rs. 20 Lakh – Rs. 8 Lakh), is negative.
In another scenario, if the depreciated value in the above example remains the same at Rs. 12 Lakhs and the selling price is Rs. 15 lakhs, in that case GST will be payable on the margin of the supplier i.e on Rs. 3 Lakhs at 18 per cent — Rs 54,000 will need to be paid as GST. (ANI)
