GST on sale of second hand car, my understanding!
One news that caught everyone's attention in the past week, was also the one which left its audience with more questions than it answered. .The news has been mis interpreted, commented on, a subject of criticism for the week The news published by Dainik Bhaskar is quite comprehensive and does a good job of explaining the tax. According to this, "If a car is sold on profit after depreciation, then the seller is liable to pay GST on that profit." So first of all this is applicable only for cars that are registered in a firm's name with GST registration . Next, GST is applicable on profit after depreciation of car's value . For example, if I purchased a car in 2024 for 6 lacs in my GST registered firm's name. After 5 years of using it and booking depreciation in my firm's ledger at 10% per annum. The book value of car after 5 years will be, 2,95,245/- INR. So if I sell my car at 3 lac rupees. The 18% GST is applicable on the profit margin that is - INR 4755/-...
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