CA Sakchi Jain Instagram – Tax on loss?
The GST Council recently raised the GST rate on second-hand cars, including EVs, to 18%. But as a seller, here’s what you need to know:
If you’re an unregistered individual selling your car directly to another person, GST does not apply—this rule is only for registered person. But if you’re a registered person GST is calculated only on the margin (the difference between the purchase price and the resale price). And the depreciated value is calculated according to the Income tax act.
To avoid confusion, here are some FAQs:
Q1: Do I have to pay GST if I sell my car to another person?
No, individual-to-individual sales are not subject to GST.
Q2: How does GST work if I’m a dealer?
If you’re a registered dealer, GST is applied only on the margin: resale price minus purchase price.
Q3: What if I sell a car at a loss?
If the resale price is less than the purchase price (negative margin), no GST is payable.
Q4: Will this increase the price of second-hand cars?
Yes, if you’re buying from dealers or platforms, they may pass on the GST cost to buyers. However, individual sales remain unaffected.
This rule simplifies the process but may impact the second-hand car market overall.
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#gstupdate #usedcarsindia #secondhandcars #carsellingtips #gstexplained #indianeconomy #casakchijain | Posted on 26/Dec/2024 19:43:21
