GST: No Tax on Sale of Old Vehicles by Individuals
GST: No Tax on Sale of Old Vehicles by Individuals
The sale of old cars or two-wheelers will not attract any GST as the sale is not furthering any business.

The Revenue Department today clarified that sale of old jewellery as well as old vehicles by individuals will not attract any GST as the sale is not for furthering any business. Clarifying on Revenue Secretary Hasmukh Adhia's comments yesterday, the Department issued a press statement saying it was informed at GST Master Class yesterday that "purchase of old gold jewellery by a jeweller from a consumer will be subject to GST at the rate of 3 percent under reverse charge mechanism in terms of the provisions contained in Section 9(4) of the Central GST Act, 2017."

It then went on to state that the said section has to be read in conjunction with another section and "even though the sale of old gold by an individual is a consideration, it cannot be said to be in the course or furtherance of his business (as selling old gold jewellery is not the business of the said individual), and hence does not qualify to be a supply per se." "Accordingly, the sale of old jewelry by an individual to a jeweller will not attract the provisions of Section 9(4) and jeweller will not be liable to pay tax under reverse charge mechanism (RCM) on such purchases," it said.

Revenue department officials said the same principle will apply to the sale of old cars or two-wheelers and no GST will be payable even though the supply would be a consideration. The statement said that Section 9(4) of the said Act mandates that tax on supply of taxable goods (gold in this case) by an unregistered supplier (an individual in this case) to a registered person (the jeweller in this case) will be paid by the registered person (the jeweller in this case) under reverse charge mechanism. But since the sale is not in consideration for the furtherance of business no tax will apply. It, however, said the tax would apply if an unregistered business sells gold ornaments to the registered supplier.

"However, if an unregistered supplier of gold ornaments sells it to the registered supplier, the tax under RCM will apply," it added. A supplier is defined as the one who buys or sells in furtherance of his business.

Also Watch:

What's your reaction?

Comments

https://wapozavr.com/assets/images/user-avatar-s.jpg

0 comment

Write the first comment for this!