Government has
issued the Notification No. 8/2018 Central Tax Rate read with state Tax
Notification, whereby it has reduced the Rate of GST on old and used vehicle as
follows:
1. GST-18% on Old
and used, petrol Liquefied petroleum gases (LPG) or compressed natural gas
(CNG) driven motor vehicles of engine capacity of 1200 cc or more and of length
of 4000 mm or more.
2. GST-18% on Old
and used, diesel driven motor vehicles of engine capacity of 1500 cc or more
and of length of 4000 mm
3. GST-18% on Old
and used motor vehicles of engine capacity exceeding 1500 cc, popularly known
as Sports Utility Vehicles (SUVs) including utility vehicles.
4. GST-12% on All
Old and used Vehicles other than those mentioned from S. No. 1 to S.No.3
The above rates are
applicable, on the value that represent margin of the supplier, on supply of
such goods.
Government also
Exempted the Cess applicable on sale of Used vehicle through Notification No.
1/2018 Compensation Cess Rate.
Conditional relief: However the above
reduction in rate of tax and exemption from cess are subject to the condition
that the supplier of such goods has not availed input tax credit as
defined in clause (63) of section 2 of the Central Goods and Services Tax Act,
2017, CENVAT as defined in CENVAT Credit Rules, 2004 or the input tax credit of
Value Added Tax or any other taxes paid, on such goods.
Valuation of Old or
Used car for GST Calculation
Value on which GST
at above rates to be calculated shall be *Margin of Supply* which is to be
calculated in the manner as mentioned in Notification which is given below:
1. In Case
Depreciation under Income Tax Act Availed: Margin of supply shall be difference
between Sale consideration and Written down Value and tax to be calculated on
such Margin, and where the margin of such supply is negative, it shall be
ignored.
2. In other cases:
Margin of Supply shall be difference between sale price and purchase price Tax
to be calculated on such Margin, and where the margin of such supply is
negative, it shall be ignored;
Full notifications
can be downloaded as follows:
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Conditional relief: However the above reduction in rate of tax and exemption from cess are subject to the condition that the supplier of such goods has not availed input tax credit as defined in clause (63) of section 2 of the Central Goods and Services Tax Act, 2017, CENVAT as defined in CENVAT Credit Rules, 2004 or the input tax credit of Value Added Tax or any other taxes paid, on such goods.