Monica Malik Instagram – In a recent GST council meeting, Finance Minister Nirmala Sitharaman suggested an 18% GST rate for selling all used vehicles.
**Misunderstanding:** Some thought this meant paying tax on losses, but that’s incorrect. The 18% GST only applies to profits when registered dealers sell used cars.
Example: If a dealer buys a car for ₹10 lakh and sells it for ₹12 lakh, GST is on the ₹2 lakh profit, not the full amount.
**Who is Affected?** Only GST-registered dealers, like Cars24 and Spinny, are affected. Private sales between individuals are not subject to this GST ❌
**For Buyers:** Buying from a GST-registered dealer might mean slightly higher costs due to GST, which will be included in your final bill.
**Not a New Tax:** The change is in the GST rate, which increased from 12% to 18% for certain vehicles like electric cars and larger engine vehicles, not introducing a new tax.
**Negative Margins:** GST isn’t applied to losses ❌It’s only on profits where the selling price exceeds the car’s depreciated value✅
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#GSTUpdates #USEDCARGST #FinanceSimplified #TaxTips #BudgetTalks #NirmalaSitharaman | Posted on 27/Dec/2024 13:45:55
