Too much confusion and social media drama around GST on used cars. 🚗
So let’s clear the air.
Here’s what you need to know:
Scenario 1:
You buy a car for ₹12 lakhs, use it for sometime and sell it to an individual for ₹9 lakhs.
GST applicable? No.
Scenario 2:
You buy a car for ₹12 lakhs, use it for some years, and sell it to a car dealer for ₹9 lakhs.
GST applicable on the margin money as a car owner? Still big NO.
So, where does GST come in?
The story starts when the car dealer resells that car for a PROFIT.
If the dealer resells it for ₹10 lakhs that they bought for ₹9 lakhs, their margin of ₹1 lakh is treated as taxable under GST.
The takeaway?
GST applies to the dealer's profit margin, not your sale margin as the car owner.
In simple terms, if you're selling your personal car and some individual is buying it for personal use then there's no business involved hence no GST.
But if you're making a business out of it and earning profit then you have to pay GST.
Hope this clears the confusion!
P.S: I saved you Nirmala Tai, please pay it back by waiving off my tax for this financial year.
So let’s clear the air.
Here’s what you need to know:
Scenario 1:
You buy a car for ₹12 lakhs, use it for sometime and sell it to an individual for ₹9 lakhs.
GST applicable? No.
Scenario 2:
You buy a car for ₹12 lakhs, use it for some years, and sell it to a car dealer for ₹9 lakhs.
GST applicable on the margin money as a car owner? Still big NO.
So, where does GST come in?
The story starts when the car dealer resells that car for a PROFIT.
If the dealer resells it for ₹10 lakhs that they bought for ₹9 lakhs, their margin of ₹1 lakh is treated as taxable under GST.
The takeaway?
GST applies to the dealer's profit margin, not your sale margin as the car owner.
In simple terms, if you're selling your personal car and some individual is buying it for personal use then there's no business involved hence no GST.
But if you're making a business out of it and earning profit then you have to pay GST.
Hope this clears the confusion!
P.S: I saved you Nirmala Tai, please pay it back by waiving off my tax for this financial year.
