GST of 18% to be levied on sale margin of a car – Newz9

NEW DELHI: While sustaining that solely registered companies concerned in sale and buy of autos, govt sources have stated items and servcies tax (GST) of 18% will be relevant on the margin of sale – the distinction between the value at which the automobile was. purchased by the enterprise and the value realized on sale.
So, if a automobile is purchased by a enterprise for say Rs 8 lakh and bought for Rs 10 lakh, the GST legal responsibility will be Rs 36,000. GST was relevant on used automobiles earlier as properly however solely in case of electrical autos the speed has been elevated from 12% to 18%, bringing them at par with petrol and diesel autos.
“Where the registered particular person has claimed depreciation below Section 32 of the Income Tax Act 1961, GST is payable solely on the worth representing the margin of the provider – the distinction between consideration obtained for the provision of such items and the depreciated worth of such items. Where such margin is adverse, no GST is payable,” a supply stated.
For occasion, if a car was bought for Rs 20 lakh and depreciation of Rs 8 lakh was claimed, leading to a depreciated worth of Rs 12 lakh. If the used automobile is bought for Rs 10 lakh then the margin is adverse and no GST is to be paid. But if the identical car was bought for Rs 14 lakh, then 18% tax will be levied on the Rs 2 lakh margin, leading to Rs 36,000 GST.