What rate GST should be charged on the new car purchased by the company when sold after using it for business purposes?

The applicant, M/s. Dishman Carbogen Amcis Limited, purchased an SUV car for Rs. 80 Lakhs for business use and did not avail of GST Input Tax Credit at the time of purchase as it is restricted under Section 17(5) of the CGST Act, 2017 but claimed depreciation under the Income Tax Act, 1961. The Written Down Value of the car as per books of accounts is Rs. 47 Lakhs at the time of selling and the applicant intends to sell the car and charge GST. The question before the authority was at what rate GST should be charged on the new car purchased by the company when sold after using it for business purposes.

The authority found that the subject car has an engine capacity exceeding 1500 cc, with diesel as its fuel. As the applicant submits that it has not availed ITC, the used car falls under the category of Serial No. 3 to Notification 8/2018-CT (R). The authority held that the value for intended supply shall be the difference between the consideration received for the supply of said car and the depreciated value of the said car on the date of supply, depreciation would be as per Section 32 Income Tax Act and GST rate leviable is 18% (9% CGST & 9% SGST).

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