Tvl. Paranthaman Engineering Works (Prop: Ponnusamy Thangaraj) (GST AAR Tamilnadu)
In GST AAR Tamil Nadu, the Authority examined whether GST on the sale of a used car by a registered manufacturing concern should be levied on the margin or on the full sale value. The applicant had purchased a new car for the proprietor’s use, capitalised it in business books, did not claim input tax credit, and had not availed depreciation. On deciding to sell the car as a used vehicle, the applicant sought applicability of the margin-based valuation under Notification No. 8/2018-CT (Rate) read with Rule 32 of the CGST Rules. The Authority held that although the sale constituted a taxable supply since the asset was capitalised and sold for consideration in the course of business, the margin scheme was unavailable. It ruled that the special valuation applies only to persons dealing in buying and selling of second-hand goods in the normal course of business, which the applicant was not. Consequently, GST was held payable on the full transaction value under Section 15(1) of the CGST Act, not merely on profit.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, TAMILNADU
1. Any appeal against this Advance Ruling order shall lie before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Sub-Section (1) of Section 100 of CGST Act 2017/ TNGST Act 2017, within 30 days from the date on which the ruling sought to be appealed is communicated.
