Government Clarifies GST On Sale Of Used Cars

The Central Government has clarified that Goods and Service Tax is not applicable on used or old car sales.

Updated: Friday, July 14, 2017, 12:27 [IST]

The Central Government implemented the Goods and Service Tax (GST) from July 1, 2017, in India. With automobiles attracting the highest GST of 28 percent plus cess based on body type and engine capacity.

However, there was no clarity about GST on used vehicles, the Revenue Departement has clarified that individuals looking to sell their old vehicles will not have to pay GST on the sale as it is not for furthering any business.

The department stated that the said section has to be read in conjunction with another section. And even though the sale of old vehicles by an individual is a consideration, it cannot be said to be as selling old cars is not the business of the said person, and hence does not qualify to be a supply per se.

However, it said that the GST would be applicable if an unregistered business sells four-wheelers or two-wheelers to the registered supplier (who buys or sells in furtherance of his business).

DriveSpark Thinks!

Now that there is clarity of GST on used cars or old cars, wherein, GST is not applicable if there is no business interest in the sale of his old car or bikes, potential buyers need to make note that any sales of registered used car or bike sales outlet will attract GST.

Also Read:

Maruti Alto Prices Slashed After GST

Maruti Swift Prices Drop After GST

Honda Activa Prices Decreased After GST

Royal Enfield Bullet, Classic And Thunderbird Prices After GST

KTM 390 Duke Prices Increase After GST