The New GST Rules On Sale Of Old Motor Vehicles



When GST came into place some years back, the sale of old and used motor vehicles got a significant hit because they were taxed at the same rate as new motor vehicles. It was capped at 28% GST plus Cess (as applicable). At the start of 2018, the government issued a new notification. Dates 25-1-8, the notification gave major relief to sellers of used/old cars.

Depending upon the category, the GST now applicable ranges from 18% to 12%, which has made buying used vehicle affordable. Furthermore, another notification was issued under the Compensation Cess (Rate) that stated all sales of old and used vehicles would be exempt from Cess.

The only question left to answer was the valuation of the vehicle. In simpler words, at what value will GST be applied. The. Notification No. 8/2018 by Central Tax (Rate) provides detailed information about the same. In most instances, the value of supply is equivalent to the margin of supply, and on this amount, GST is applicable.  Two cases define the margin of supply:
  • If depreciation is claimed under section 32 of the Income Tax Act 1961.
  • And all other instances in which the difference between the selling price and the purchase price is the Margin of Supply.

Comments

  1. VakilSearch - GST Registration31 May 2019 at 00:57

    From GST Registration to filing for the income tax return, the new procedure set by the government to pay taxes is hard to understand. At VakilSearch, we make it simpler by assisting you in filing returns while complying with all rules and regulations.
    Be it a sale of an old car or ITR filing for your company, with us you get to submit GST from the comfort of your couch at home. Take the first, easy step. Fill in a short form and one of our experts will help answer all your GST related questions in a jiffy.

    ReplyDelete
    Replies
    1. Thank you Vakil Search for your informative inputs about GST registration. The new procedure is indeed very difficult to understand. But, with professional experts like you to help and guide us, even the most muddling task becomes easy. Keep up the good work, guys!

      Delete
  2. The article really helped us while buying a used truck whose depreciation had been claimed under section 32. Because of the post, we knew that the margin of supply is calculated differently. It is the variance between sale consideration received and depreciated value of it on the date of supply.

    ReplyDelete
  3. The one point skipped in the post is that according to the new GST notification, there is no date condition set. No matter which date the motor vehicle was purchased, when it is sold as an old or used vehicle, the GST rules remain the same. Besides this, the article covers all crucial elements.

    ReplyDelete
  4. I just sold my old car which had an engine capacity of over 1500cc. As per the rule, because the vehicle was over 4000 mm in length with a 170mm ground clearance, it was classified as an SUV. Therefore, the GST Rate applicable was 18%.

    ReplyDelete
  5. This is very nice post covering all aspects...thanks for sharing us. For more information about the process of GEM Registration.
    https://www.unilexconsultants.com/registrations/GEM-Registration/

    ReplyDelete
  6. Thank you for sharing such a wonderful information about this. You can also view more about Private Limited Company Registration
    https://www.unilexconsultants.com/start-a-business/private-limited-company-registration/

    ReplyDelete
  7. Nice article, which you have shared here about the GST rules. Your article is very informative and useful to know more about the impacts of new rules of GST on selling old Motor Vehicles. Thanks for sharing this article here. If anyone looking for the Gst Filing Services, digitalfilings is the best choice.

    ReplyDelete
  8. One of the best article, that you have got shared here concerning the GST rules. Your article is incredibly informative and helpful to understand additional concerning the impacts of the latest rules of GST on commerce recent motorized vehicles. Thanks for sharing this text here. If anyone searching for the Gst Filing Services, digitalfilings is that the best option.

    ReplyDelete
  9. Agricultural and Processed Food merchandise Export Development Authority (APEDA) was established by the govt. of Asian nation below the Agricultural and Processed Food merchandise Export Development Authority Act.

    ReplyDelete

  10. You write this post very carefully I think, which is easily understandable to me. Not only this, but another post is also good. As a newbie, this info is really helpful for me. Thanks to you.
    Tally ERP 9 Training
    tally classes
    Tally Training institute in Chennai
    Tally course in Chennai

    ReplyDelete
  11. I think this is an informative post and it is very useful and knowledgeable. therefore, I would like to thank you for the efforts you have made in writing this article.
    angular js training in chennai

    angular js online training in chennai

    angular js training in bangalore

    angular js training in hyderabad

    angular js training in coimbatore

    angular js training

    angular js online training

    ReplyDelete
  12. Thank you for sharing such a wonderful information about this. You can also view more about Private Limited Company Registration

    ReplyDelete
  13. wonderful article contains lot of valuable information. Very interesting to read this article.I would like to thank you for the efforts you had made for writing this awesome article.
    This article resolved my all queries.good luck an best wishes to the team members.continue posting.learn digital marketing use these following link
    Digital Marketing Course in Chennai

    ReplyDelete
  14. I found your Content very useful. This information is really useful, Thank you for sharing with us.
    Import/Buy a laptop from the USA to India

    ReplyDelete
  15. I found your Content very useful. This information is really useful, Thank you for sharing with us.
    Union Budget 2021: Impact on Individual Tax payers

    ReplyDelete
  16. This is because these customers will not only be loyal in case of losses but will also stick to the business when new competitors enter the market. Salesforce interview questions

    ReplyDelete
  17. อีกทั้งเรายังให้บริการ เกมสล็อต ยิงปลา แทงบอลออนไลน์ รองรับทุกการใช้งานในอุปกรณ์ต่าง ๆ HTML5 คอมพิวเตอร์ แท็บเล็ต สมาทโฟน คาสิโนออนไลน์ และมือถือทุกรุ่น เล่นได้ตลอด 24ชม. ไม่ต้อง Downloads เกมส์ให้ยุ่งยาก ด้วยระบบที่เสถียรที่สุดในประเทศไทย

    ReplyDelete
  18. อย่างไรก็ตามในการเล่นเกมส์คาสิโนออนไลน์หรือการเดิมพันออนไลน์ชนิดต่างๆคุณจะต้องให้ความสำคัญในเรื่องของการเลือกเว็บคาสิโนออนไลน์เลือกเว็บเดิมพันออนไลน์ที่คุณจะใช้บริการให้ดีคุณจำเป็ สล็อต นที่จะต้องศึกษาและหาข้อมูลเกี่ยวกับเว็บก่อนที่คุณจะตัดสินใจใช้บริการเพื่อความปลอดภัยในการใช้บริการของคุณและเพื่อประโยชน์ในการใช้บริการเว็บที่คุณจะต้องใช้บริการไปอีกนานถ้าคุณใช้บริการเว็บที่ให้บริการที่ดีคุณก็จะมีความสะดวกสบายในการใช้บริการเว็บคาสิโนออนไลน์หรือเว็บเดิมพันออนไลน์ต่างๆ

    ReplyDelete

Post a Comment

Popular posts from this blog

Restoring a Vintage Car to Its Original Self

Get More Out Of Your UPS With External Batteries