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The 55th GST Council meeting held on December 21, 2024, in Jaisalmer, Rajasthan, introduced a uniform 18% GST rate on the sale of all used cars, including electric vehicles (EVs). This decision standardizes GST on second-hand cars, as previously, EVs were taxed at 12%, while petrol, diesel, and LPG cars were subject to 18% GST. Key Takeaways on GST rate on the sale of all used cars, including EVs
📌 Case 1: If a registered person bought a car for INR 20,00,000/-, claimed INR 8,00,000/- depreciation, and later sells it for INR 10,00,000/-, then:
📌 Case 2: If a registered person bought a car for INR 20,00,000/-, claimed INR 8,00,000/- depreciation, and later sells it for INR 15,00,000/-, then:
📌 Case 3: If a registered person buys a used car for INR 12,00,000/- and sells it for INR 10,00,000/-, the margin is negative (₹- INR 2,00,000/).
📌 Case 4: If a registered person buys a used car for INR 20,00,000/- and sells it for INR 22,00,000/-, then:
Value of valuation of old car i.e. what shall be the value on which GST shall be applicable. As per the GST Notification, the Value of Supply shall be the “Margin of Supply”. The margin of Supply means:-
The supply margin is the difference between the selling and purchasing prices, and it is ignored if the margin is negative.
In case the old/ used card/vehicle’s Supplier is State government, central govt, /Local authority, Union territory of the recipient is –
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