GST Rate on old and used motor vehicles reduced-latest notifications

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:




0 comments :

Post a Comment