Question 49: A partnership firm dealing in trading of paper and registered under GST buys a car for daily use and after a year sells it .Whether GST will be charged on same' please Give reasons for the answer.

Further is there will be separate treatment if car has been purchased before 01.07.2017 that is under VAT regime.

Note: No ITC has been claimed at the time of purchase of car.

Answer According to the provisions of Section 7(1) of CGST Act, 2017 all forms of supply of goods or services or both such as sale , transfer, barter, exchange, licence, rental, lease or disposal etc. made for a consideration by a person in furtherance of business would be covered under the term 'Supply' and would be leviable to tax under the GST regime at the appropriate rate applicable according to relevant HSN Code, irrespective of the fact whether credit has been availed or not under earlier of existing regime.

Section 17 (5) restrict availability of ITC

In case of car the credit can be availed only in case when the car is used for providing outward supply of renting etc of it

It seems that you are not providing services of that kind so credit is not available to you .(REPLY dt. 24/1/2018)