The GST Council clarified that it has simplified the tax rate and recommended unifying and prescribing a single rate of GST on the sale of all old and used vehicles including EVs at 18%. Experts in the field on Tuesday clarified that the GST Council has not recommended the imposition of any new tax for old and used vehicles in the recent meeting. The experts clarified that the GST Council has simplified the tax rate and recommended unifying and prescribing a single rate of GST on the sale of all old and used vehicles including EVs at 18%.
As a measure of simplification, the Council recommended unifying and prescribing a single rate of GST on the sale of all old and used vehicles, including EVs, at 18%, which was leviable at different rates earlier. The GST Council has NOT recommended any imposition of the new tax on the same,” experts on GST rate rationalisation said on Tuesday.
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Officials have outlined clear examples to demonstrate how GST is applied under different scenarios:
Negative margin with depreciation
Purchase Price: Rs 20 lakhs
Depreciated Value: Rs 12 lakhs
Selling Price: Rs 10 lakhs
Margin: Negative (Rs 10 lakhs — Rs 12 lakhs = -Rs 2 lakhs)
GST Payable: None.
When the sale price is lower than the depreciated value, no GST is payable.
Negative margin without depreciation
Purchase Price: Rs 12 lakhs
Selling Price: Rs 10 lakhs
Margin: Negative (Rs 10 lakhs — Rs 12 lakhs = -Rs 2 lakhs)
GST Payable: None.
Even when depreciation is not claimed, GST is not applicable on a negative margin.
Purchase Price: Rs 20 lakhs
Selling Price: Rs 22 lakhs
Margin: Rs 2 lakhs (Rs 22 lakhs — Rs 20 lakhs)
GST Payable: 18 per cent of Rs 2 lakhs = Rs 36,000.
GST is applied at a standard rate of 18 per cent when the margin is positive.
Conclusion: GST on Used Cars: Is it a New Tax?
The application of GST on used cars is not a new tax introduced in India. It has been part of the GST framework since its inception in 2017, with refinements made to tax only the margin value to avoid double taxation. At BRD Luxe Showroom, GST is charged as per government regulations, ensuring compliance and transparency.
For buyers, this means:
- Fair Pricing: GST is applied only to the dealer’s profit margin, not the entire car value.
- No Hidden Costs: Pricing at BRD Luxe remains competitive while adhering to tax laws.
- Certified Transactions: GST ensures that all transactions are official and recorded.
This approach supports both luxury car enthusiasts and the government’s broader tax collection goals without introducing any new tax burdens.
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📧 Email: info@brdluxe.com
📱 Phone: 89430 77777
🌐 Website: https://www.brdluxe.com/
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📍 Visit us at BRD Complex, NH Bypass, Konikkara. P.O, Thrissur, Kerala—680306.
