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:-
1. Notification No- 8/2018-Central tax (Rate)
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)
4. Notification No.-1/2018-Compensation Cess (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:-
- In a case of a registered person who has claimed depreciation u/s 32 of Income Tax Act, 1961(43 of 1961) on the said goods, the value that represents the margin of the supplier shall be the difference between the consideration received for the supply of such goods and the depreciation value of such goods on the date of supply, and where the margin of such supply is negative, it shall be ignored; and
- in any other case, the value that represents the margin of the supplier shall be, the difference between the selling price and the purchase price and where such margin is negative, it shall be ignored.
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
|
28%
|
15% |
| 2. | 8703 | Old and used diesel motor vehicles having engine capacity >= 1500 cc and length = 4000 mm | 18% | Nil
|
28% | 15% |
| 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%
|
Nil | 28% | 15% |
| 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%).
I am a registered dealer I have a purchase of JCB earlier under VAT act and know I am selling under GST?
I want to know that shall I have to charge any GST at the time of sell or not.
Hi Nitish
In a company, which value should be considered as WDV either value as per companies act or ass per income tax act?
Further if it is not possible to calculate individual vehicle WDV as per Income Tax Act due to Block of Asset system. What can we do?
Old Petrol car sold with margin comes under 18% gst or 12% gst. Because if you look at the new notification – petrol vehicle was not mentioned in first 3 items and it falls on Sl no. 4
I am fleet based GTA under RCM to an individual, I would like to know if i sold my vehicle purchased for 10 lakhs, wdv 5 lakhs,
1. at 7 lakhs or at 4 lakhs.
What will be the applicable GST if any i need to charge (9819253670, 9819253610)
Hi Nitish,
If i am an unregistered person and sell my personal car to a registered person having WDV of Rs. 80 Lacs at a price of Rs. 90 Lacs (Case 1) whether I’ll be required to pay GST on such transaction or not?
what is the effect if I am happens to be partner of a company which is registered under GST
Hi Nitish
If i am registered gta and sell my capitalized trucks to unregistered person having WDV of INR 5 Lacs at a price of INR 4.5Lacs, whether i will be required to pay GST on sale value or on margin of supply?
What is Depreciation Value on the date of supply? Whether it is WDV? If WDV , Whether is IT WDV or Book WDV? If IT WDV how do we compute depreciation upto to the date of supply?
Good Article .
An example covering lots of combination may also be posted for better understanding.
Kindly give clarification about difference between Notification No. 37/2017 Central Tax(Rate) & 8/2018 Central Tax rate
good article
Hi Nitish,
If i am an unregistered person and sell my personal car to another unregistered person having WDV of Rs. 8 Lacs at a price of Rs. 10 Lacs (Case 1) or Rs 6 Lacs (Case 2), whether I’ll be required to pay GST on such transaction or not?
Further if the depreciation value to be considered then which WDV would be considered, as per books (Companies Act, 2013) or as per income tax provisions?