Question28:
Mr. X purchased car in 2015 in the name of his firm
, now in 2018 Mr. X want to sell his car, so whether Mr. will liable to pay GST
, also in 2015 he hadn’t took any ITC of the car but use the depreciation on the
car.
IF Mr. x has to pay GST in 2018 , on which document will he show this sale bcoz
as per GST registration he glass dealer . Will he issue his tax invoice under
his GST NO. for the purpose of sale of his car.
Also under which columns of GSTR-1 and GSTR 3B he will show this car sale
and payment of GST.
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.
Also as per Schedule II Transfer of business assets
(a) where goods forming part of the assets of a business are transferred or
disposed of by or under the directions of the person carrying on the business so
as no longer to form part of those assets, whether or not for a consideration,
such transfer or disposal is a supply of goods by the person
Therefore sale of car is taxable supply and you will be liable to pay GST.
Yes, You are required to raise tax invoice for the sale of Fixed assets because
as per section 31 for each taxable supply tax invoice shall be raised
You will even raise invoice on the same GSTIN of glass dealer. No you need not
required separate GSTIN because GST registration is PAN based not activities or
business based.
Now the point arises of rate of tax on this supply.
As you are not availed the ITC on car then you will take the benefit of
concessional rate on such supply as per Notification No. 8/2018 -Central Tax
(Rate) dt. 25.01.2018 which provides concession on the rate of tax on old and
used motor vehicles under HSN 8703 /87 from 28% to 18%/12% and Vide
Notification No. 1/2018-Compensation Cess (Rate) dt. 25th January, 2018 ,
compensation cess on all old and used motor vehicles shall be NIL w.e.f
25.01.2018
The rate(18% /12%) on sale of old car in your case depends upon car engine
capacity, length of motor vehicles or diesel or petrol vehicle.
Further, according to Explanation (i) of Notification No. 8/2018 -Central Tax
(Rate) dt. 25.01.2018 for calculating taxable value in case of a registered
person who has claimed depreciation under section 32 of the Income-Tax
Act,1961(43 of 1961) on the said goods, the value that represents the margin of
the supplier shall be the difference between the consideration received for
supply of such goods and the depreciated value of such goods on the date of
supply, and where the margin of such supply is negative, it shall be ignored.
For example XYZ Ltd Selling car for Rs 260000 and Depreciated value on that date is 300000 then as per above notification value of supply(margin) is [260000-300000=(40000)] negative. Therefore XYZ Ltd. is not liable to pay GST on such supply.
If the selling price is Rs 350000 then the taxable value of supply (margin) is [350000-300000=50000], XYZ Ltd. is required to pay GST on Rs 50000 @ 18%/12% as the case may be.
You will show this kind of Supply in returns in the same place where other taxable supplies are shown. But only when in the end of Financial year you are calculating your annual sale turnover then this kind of supply shall be subtracted from aggregate of supplies shown in the returns for the purpose of Reconciliation. (Reply dt. 12/4/2018)