GST - Buying Used Vehicle is More Good Now?
GST impacts are reflecting on all products and services now. Let’s check the Impact of GST on used vehicles (Car, Bike, Bus, Jeep etc.) valuation and the price impact on the sale and purchase through dealer or when it is a direct sale, please see the impact here below.
- Sale & Purchase among Individuals: There will not be any GST if you are doing used vehicle transaction among Individuals. The buyer or seller not to worry about GST. Hence, this is not a business deal; no GST will be required to be paid.
- Sale by an Individual & Bought by Dealer: If you are an Individual and selling your used vehicle to a dealer, then as an individual there is no GST liability. Also for dealer, as this is not a complete business transaction (That transaction is been completed only when the dealer sells that vehicle). So, no GST will be payable by him too.
- Sale by Dealer & Bought by an Individual: If you are an Individual and buying used vehicle from a dealer then again no GST Liability for the Individual. But, the dealer who is selling the used vehicle has the GST Liability. The GST shall be 28% and this will be charged on the margin.
The GST Liability shall not be computed on the transaction amount, but on the margins which the dealer makes. For example, the dealer buys a car worth Rupees 5 Lakhs and sell it for 5.5 Lakhs to an Individual then the dealer’s final liability of GST would be 28% on the margin amount of Rs.50,000/-
- Sale & Purchase among Vehicle Dealers: If the used vehicle dealer is selling a vehicle to another dealer, then same way the GST shall be on margin amount of the Seller.
The GST in used vehicles shall be paid only on the margin, which is the actual profit amount only. If the sale is not doing without profit or on loss no need of paying GST. So, there is no much GST impacton the price of the used vehicles in India.
