There has been a drastic change in the GST rate on sale of old and used motor vehicles. Below are the notifications issued on 25th January 2018 for the reference:-
2. Similar notification has been issued under the UTGST ACT vide Notification No- 8/2018-Union Territory tax (Rate)
3. Similar notification has been issued under the IGST ACT vide Notification No- 9/2018- Integrated Tax (Rate)
As per the above notifications if a person make sale of old and used vehicles, GST rate is to be computed on value that determine the margin of the supplier of the goods, on supply of such goods.
For the purpose of this notifications margin of the supplier is:-
Nothing contained in the above said notifications shall apply to the suppliers those who have availed input tax credit under CGST Act, 2017 or CCR, 2004 or VAT or any other taxes paid.
A comparison chart of revised rate in case of sale of old and used motor vehicle as per recent notification and the initial notifications is as follows:
|S. No.||Chapter, Heading, Subheading or Tariff item||Description of Goods||As per recent notification issued on 25th January 2018||As per old notification issued on 28th June 2017|
|GST Rate||Compensation Cess rate||GST Rate||Compensation Cess rate|
|1.||8703||Old and used petrol, LPG and CNG motor vehicles having engine capacity >= 1200 cc and length >= 4000 mm||18%||Nil
|2.||8703||Old and used diesel motor vehicles having engine capacity >= 1500 cc and length = 4000 mm||18%||Nil
|3.||8703||Old and used motor vehicles having engine capacity > 1500 cc and length > 4000 mm and ground clearance >= 170 mm (popularly known as SUV)||18%
|4.||87||All other old and used vehicles except above 3||12%||Nil||28%||1% for petrol and 3% for Diesel|
Conclusion:- GST rate on sale of old and used vehicles has been reduced to 12% and 18% (depending on the size of vehicle) from the existing 28% and scrap the cess (varying from 1-15%).