The GST Council, in a meeting held last week, decided to apply a uniform 18% GST on all old and worn vehicles, including electric vehicles (EVs). Earlier it was levied at different rates.This rule has brought about confusion among car sellers. Meanwhile, a video of Finance Minister Nirmala Sitharaman surfaced on social media, in which she talked about 18 percent GST on the sale of old cars.
GST on selling old cars: After the public reaction to the increased tax on caramelised popcorn, now the 18% GST on old and used cars has caught people’s attention.The GST Council, in a meeting held last week, decided to apply a uniform 18% GST on all old and worn vehicles, including electric vehicles (EVs). Earlier it was levied at different rates.This rule has brought about confusion among car sellers. Meanwhile, a video of Finance Minister Nirmala Sitharaman surfaced on social media, in which she talked about 18 percent GST on the sale of old cars.
18% GST will be levied only on margin
Nirmala Sitharaman said in the video, “This tax is relevant only on the margin. If you bought the car for ₹ 12 lakh and sold it for ₹ 9 lakh, then 18% GST will be levied only on that margin (ie ₹ 3 lakh). It is not levied on the complete sale amount.”Apart from this, if a person sells his old car to another person, then GST will not be applicable on it.If a GST registered person has claimed crash on the vehicle, then tax will be levied only on the margin, which is the dissimilarity between the selling price and the lose value.
