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All QuestionsCategory: GST ConsultancyGST on Second hand car sale by dealer
Profile photo of Kuldeep SrivastavaKuldeep Srivastava asked 2 months ago

GST on Second hand car sale by dealer

Case 1: Purchased a second-hand accidental car and sale that car after proper repair. As per Law, Dealers can supply the goods as such or after minor processing which does not change the nature of such goods.

But here in this case dealer repair the car, but it does not change its nature.

How can we calculate GST? Will it be on Margin or Full transaction value.

Case 2: When dealers buy second-hand cars from the government, reverse charge is applicable. So, on which amount dealer has to pay the GST and after paying the GST on reverse charge. If we take that input. Will, we can charge a reduced GST rate on the Sale of Cars on margin Calculation.

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Profile photo of JATIN BANSALJATIN BANSAL replied 2 months ago

Hey, My name is CA Jatin Bansal and I have an experience in Automobile Industry and currently handling also clients regarding Automobile Industry So here is the answer

Case 1 – In case of second hand cars, GST is to charged only on Margin Money or Profit between Sale Price and Purchase Price (including Expenses spend on car) and GST Rate is 12%.

Case 2 – Reverse Charge is regarding Purchase Transaction and you can take up its Input without any issue and it is to be calculated on Purchase Price as respect to its value or varients. And Secondly, Transaction regarding to Sale is same as mentioned in Case 1 above. So don’t stuck or confuse in this both transactions.

Thanks & Regards
CA Jatin Bansal
+91-9988666349
Contact to reach us.