Question7: A Ltd sells its old & used car to an individual in October, 2017. The car was purchased by A Ltd much before 01/07/2017. ITC Credit of VAT and CENVAT paid on car was not admissible/ taken in VAT/ CENVAT era. In the GST era also ITC paid on car is not permitted. Please advise whether A Ltd is liable to pay GST on sale of car in October, 2017.

Answer: The taxing event under GST regime is supply of goods or services or both. According to Section 7(1)(a) 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 made or agreed to be made for a consideration by a person in the course or furtherance of business amounts to supply and is taxable under GST regime irrespective of the fact whether ITC has been availed under earlier/existing regime or not. The liability to pay tax is not related availment of credit . The passenger vehicle, purchased under earlier regime is taxable under GST regime as the same is being sold for a consideration in furtherance of business. (Reply dt. 20/11/2017)