{"id":28666,"date":"2025-02-09T15:42:41","date_gmt":"2025-02-09T10:12:41","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=28666"},"modified":"2025-03-27T16:23:50","modified_gmt":"2025-03-27T10:53:50","slug":"28666-2","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/28666-2\/","title":{"rendered":"GST on sale of all used cars, including electric vehicles"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d1981ed63dd\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d1981ed63dd\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/28666-2\/#GST_on_sale_of_all_used_cars_including_electric_vehicles\" title=\"GST on sale of all used cars, including electric vehicles\">GST on sale of all used cars, including electric vehicles<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/28666-2\/#Who_Pays_GST\" title=\"Who Pays GST?\">Who Pays GST?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/28666-2\/#When_is_GST_applicable\" title=\"When is GST applicable?\">When is GST applicable?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/28666-2\/#Margin_Calculation\" title=\"Margin Calculation:\">Margin Calculation:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/28666-2\/#Examples\" title=\"Examples:\">Examples:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/28666-2\/#GST_Valuation_on_sale_of_used_motor_carold_vehicle\" title=\"GST Valuation on sale of used motor car\/old vehicle\">GST Valuation on sale of used motor car\/old vehicle<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/28666-2\/#In_case_the_depreciation_Claimed_under_Section_32_of_Income_Tax_Act_1961\" title=\"In case the depreciation Claimed under Section 32 of Income Tax Act 1961:-\">In case the depreciation Claimed under Section 32 of Income Tax Act 1961:-<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/28666-2\/#In_all_other_cases_%E2%80%93\" title=\"In all other cases: \u2013\u00a0\">In all other cases: \u2013\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/28666-2\/#In_case_old_or_used_car_or_vehicle_is_sold_by_the_Government_of_India_%E2%80%93\" title=\"In case old or used car or vehicle is sold by the Government of India: &#8211;\">In case old or used car or vehicle is sold by the Government of India: &#8211;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/28666-2\/#Impact_of_the_Decision_GST_rate_on_the_sale_of_all_used_cars_including_EVs\" title=\"Impact of the Decision GST rate on the sale of all used cars, including EVs\">Impact of the Decision GST rate on the sale of all used cars, including EVs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/28666-2\/#Conclusion_on_GST_Applicable_provision_on_GST_on_sale_of_old_Carvehicles\" title=\"Conclusion on GST Applicable provision on GST on sale of old Car\/vehicles.\u00a0\">Conclusion on GST Applicable provision on GST on sale of old Car\/vehicles.\u00a0<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/28666-2\/#GST_Rate_on_sale_of_used_motor_Car_vehicles\" title=\"GST Rate on sale of used motor Car\/ vehicles\">GST Rate on sale of used motor Car\/ vehicles<\/a><\/li><\/ul><\/nav><\/div>\n<p><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-13302\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/06\/tax_pay.png\" alt=\"www.carajput.com: Direct Tax Update\" width=\"1012\" height=\"531\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/06\/tax_pay.png 610w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2019\/06\/tax_pay-300x157.png 300w\" sizes=\"(max-width: 1012px) 100vw, 1012px\" \/><\/p>\n<h2><span class=\"ez-toc-section\" id=\"GST_on_sale_of_all_used_cars_including_electric_vehicles\"><\/span><span style=\"color: #000080;\">GST on sale of all used cars, including electric vehicles<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>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<\/p>\n<ol>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Who_Pays_GST\"><\/span><span style=\"color: #000080;\"><strong>Who Pays GST?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Only \u201cregistered persons\u201d (businesses engaged in buying &amp; selling used cars) are liable to pay GST. Individuals selling used cars to another individual are exempt from GST.<\/li>\n<\/ul>\n<\/li>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"When_is_GST_applicable\"><\/span><span style=\"color: #000080;\"><strong>When is GST applicable?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>GST is charged only if there is a profit margin on the sale. If a registered person sells a car at a loss (negative margin), no GST applies.<\/li>\n<\/ul>\n<\/li>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Margin_Calculation\"><\/span><span style=\"color: #000080;\"><strong>Margin Calculation:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>For those claiming depreciation under the Income Tax Act, GST is applied only on the difference between the sale price and the depreciated value.<\/li>\n<li>For others: GST applies to the difference between purchase price and selling price.<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n<h3><span class=\"ez-toc-section\" id=\"Examples\"><\/span><span style=\"color: #000080;\"><strong>Examples:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><strong>\ud83d\udccc <span style=\"color: #000080;\">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:<\/span><\/strong><\/p>\n<ul>\n<li>The car\u2019s depreciated value is INR 12,00,000\/-.<\/li>\n<li>Since the sale price (INR 10,00,000\/-) is less than INR 12,00,000\/-, the margin is negative (\u20b9-INR 2,00,000\/-).<\/li>\n<li>No GST is charged.<\/li>\n<\/ul>\n<p><strong>\ud83d\udccc <span style=\"color: #000080;\">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:<\/span><\/strong><\/p>\n<ul>\n<li>The car\u2019s depreciated value is INR 12,00,000\/-.<\/li>\n<li>The profit margin is \u20b93 lakh (INR 15,00,000\/- &#8211; INR 12,00,000\/-).<\/li>\n<li>18% GST applies on INR 3,00,000\/-.<\/li>\n<\/ul>\n<p><strong>\ud83d\udccc<span style=\"color: #000080;\"> 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 (\u20b9- INR 2,00,000\/).<\/span><\/strong><\/p>\n<ul>\n<li>No GST is charged<strong>.<\/strong><\/li>\n<\/ul>\n<p><strong>\ud83d\udccc <span style=\"color: #000080;\">Case 4: If a registered person buys a used car for INR 20,00,000\/- and sells it for INR 22,00,000\/-, then:<\/span><\/strong><\/p>\n<ul>\n<li>Profit margin = INR 2,00,000\/- (INR 22,00,000\/- &#8211; INR 20,00,000\/-).<\/li>\n<li>18% GST applies on INR 2,00,000\/-.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"GST_Valuation_on_sale_of_used_motor_carold_vehicle\"><\/span><span style=\"color: #ff0000;\"><span class=\"ez-toc-section\">GST <\/span><span class=\"ez-toc-section\">Valuation <\/span><span class=\"ez-toc-section\">on sale of used motor car\/old vehicle<\/span><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Value of valuation of old car i.e. what shall be the value on which GST shall be applicable. As per the\u00a0 GST Notification, the Value of Supply shall be the \u201cMargin of Supply\u201d.\u00a0The margin of Supply means:-<\/p>\n<h3><span class=\"ez-toc-section\" id=\"In_case_the_depreciation_Claimed_under_Section_32_of_Income_Tax_Act_1961\"><\/span><strong><span style=\"color: #000080;\">In case the depreciation Claimed under Section 32 of Income Tax Act 1961:-<\/span><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Where depreciation has been claimed on the said goods u\/s 32 of the Income Tax Act 1961, the Margin of Supply shall be the difference between the Sale consideration received for supply of such goods and the depreciated value of such goods on the date of supply, and the margin of such supply shall be negative, then it should be ignored.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"In_all_other_cases_%E2%80%93\"><\/span><strong><span style=\"color: #000080;\">In all other cases: \u2013\u00a0<\/span><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The supply margin is the difference between the selling and purchasing prices, and it is ignored if the margin is negative.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-17433\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/06\/GST-Impact-on-Buying-or-Selling-of-Used-Vehicles.1-300x205.jpg\" alt=\"GST-Impact-on-Buying-or-Selling-of-Used-Vehicles.\" width=\"909\" height=\"624\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"In_case_old_or_used_car_or_vehicle_is_sold_by_the_Government_of_India_%E2%80%93\"><\/span><span style=\"color: #000080;\"><strong>In case old or used car or vehicle is sold by the Government of India: &#8211;<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In case the old\/ used card\/vehicle\u2019s Supplier is State government, central govt, \/Local authority,\u00a0 Union territory of the recipient is \u2013<\/p>\n<ul>\n<li>In case unregistered person:\u00a0 Unregistered will have to obtain GST registration and pay GST<\/li>\n<li>in the case of registered person: Registered person will be liable to pay tax on RCM basis.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Impact_of_the_Decision_GST_rate_on_the_sale_of_all_used_cars_including_EVs\"><\/span><span style=\"color: #000080;\"><strong>Impact of the Decision GST rate on the sale of all used cars, including EVs<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Clarity &amp; Simplification \u2013 One uniform 18% rate avoids confusion between petrol\/diesel and EV tax rates.<\/li>\n<li>Lower Tax for EVs \u2013 Previously taxed at 12% on the full value, now GST applies only on profit margin.<\/li>\n<li>Benefit for Individual Sellers \u2013 No GST burden for person-to-person sales.<\/li>\n<li>Boost to Used Car Market \u2013 More structured taxation can encourage organized players in the second-hand car industry.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Conclusion_on_GST_Applicable_provision_on_GST_on_sale_of_old_Carvehicles\"><\/span><span id=\"Summarised_provisions_for_GST_on_sale_of_old_vehicles_cars\" class=\"ez-toc-section\" style=\"color: #ff0000;\"><span style=\"color: #000080;\">Conclusion on GST Applicable provision on GST on <\/span><a href=\"https:\/\/www.caindelhiindia.com\/blog\/hiring-of-motor-vehicles-service-tax\/\"><span style=\"color: #000080;\">sale of old Car\/vehicles.\u00a0<\/span><\/a><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<h2><span class=\"ez-toc-section\" id=\"GST_Rate_on_sale_of_used_motor_Car_vehicles\"><\/span><span id=\"What_is_the_rate_of_GST_on_the_sale_of_used_motor_vehiclescars\" class=\"ez-toc-section\" style=\"color: #ff0000;\">GST Rate on sale of used motor Car\/ vehicles<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-28125\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2017\/07\/GST-on-Ev-.jpg\" alt=\"\" width=\"911\" height=\"1280\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2017\/07\/GST-on-Ev-.jpg 911w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2017\/07\/GST-on-Ev--214x300.jpg 214w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2017\/07\/GST-on-Ev--729x1024.jpg 729w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2017\/07\/GST-on-Ev--768x1079.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2017\/07\/GST-on-Ev--800x1124.jpg 800w\" sizes=\"(max-width: 911px) 100vw, 911px\" \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>GST on sale of all used cars, including electric vehicles 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 &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[172],"tags":[10247],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/28666"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=28666"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/28666\/revisions"}],"predecessor-version":[{"id":28673,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/28666\/revisions\/28673"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=28666"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=28666"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=28666"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}