Question

GST registered company sales old/used car so GST applicable on sales of old/used car? Is GST applicable what is rate and also cess is applicable in this car? how to calculation of cess?

Answer

According to the provisions of Section 7(1) of CGST Act, 2017 all forms of supply of goods or services or both such as sale , transfer, barter, exchange, licence, rental, lease or disposal etc. made for a consideration by a person in furtherance of business would be covered under the term 'Supply' and would be leviable to tax under the GST regime.

Also as per Schedule II Transfer of business assets
(a) where goods forming part of the assets of a business are transferred or disposed of by or under the directions of the person carrying on the business so as no longer to form part of those assets, whether or not for a consideration, such transfer or disposal is a supply of goods by the person

Therefore sale of old/used car is taxable supply and you will be liable to pay GST.

So far as rate of tax is concerned if you have not availed the ITC on car then you will take the benefit of concessional rate on such supply as per Notification No. 8/2018 -Central Tax (Rate) dt. 25.01.2018 which provides concession on the rate of tax on old and used motor vehicles under HSN 8703 /87 from 28% to 18%/12% and Vide Notification No. 1/2018-Compensation Cess (Rate) dt. 25th January, 2018 , compensation cess on all old and used motor vehicles shall be NIL w.e.f 25.01.2018.

The rate(18% /12%) on sale of old car depends upon car engine capacity, length of motor vehicles or diesel or petrol vehicle as specified in Notification No. 8/2018 -Central Tax (Rate) dt. 25.01.2018.

Further, according to Explanation (i) and (ii) of Notification No. 8/2018 -Central Tax (Rate) dt. 25.01.2018 for calculating taxable value in case of a registered person who has claimed depreciation under section 32 of the Income-Tax Act,1961(43 of 1961) on the said goods, the value that represents the margin of the supplier shall be the difference between the consideration received for supply of such goods and the depreciated value of such goods on the date of supply, and where the margin of such supply is negative, it shall be ignored.
In any other case, the value that represents the margin of supplier shall be, the difference between the selling price and the purchase price and where such margin is negative, it shall be ignored. (Reply dt.05/07/2018)