A. If Motor Vehicle was purchased on payment of tax and input tax credit as defined in Section 2(63) of the Central Goods and Services Tax Act, 2017, CENVAT as defined in CENVAT Credit Rules, 2004 or the input tax credit of Value Added Tax or any other taxes paid, on such goods has not been availed by the Supplier, then the registered person shall be liable to pay GST on below discussed rates on the value that represents margin of Supplier on the supply of such goods. The following represent the series of steps to be undertaken to determine the amount of GST liability.

  1. Classify the old Motor Vehicle in the following Categories as per Notification No. 08/2018 Central Tax (Rate) dated 25.01.2018 into:

a) Liquified Petroleum Gas or Compressed Natural Gas Driven Motor Vehicle of Engine Capacity of 1200 cc or more and of length of 4000 mm or more; or

b) Diesel Driven Motor Vehicles of Engine Capacity of 1500 cc or more and of length of 4000 mm.

c) Motor Vehicles of Engine Capacity exceeding 1500 cc, popularly known as Sports Utility Vehicles (SUVs) including utility vehicles.

d) Other than those mentioned from S. No. 1 to S.No.3

 

2.       Classify the registered person based on whether he claims depreciation under section 32 of the  Income-Tax Act,1961 or not.

a) 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 margin 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.

b) In any other case, the margin shall be the difference between the selling price and the purchase price and where such margin is negative, it shall be ignored.

3.        If Margin on supply as computed as per S.no. (B) above is positive, the following rates shall prevail for cars mentioned at S.no. (A) above

a) 18% (9% CGST & 9% SGST)

i) For Liquified Petroleum Gas or Compressed Natural Gas Driven Motor Vehicle of Engine Capacity of 1200 cc or more and of length of 4000 mm or more.

ii) Diesel Driven Motor Vehicles of Engine Capacity of 1500 cc or more and of length of 4000 mm.

iii) Motor Vehicles of Engine Capacity exceeding 1500 cc, popularly known as Sports Utility Vehicles (SUVs) including utility vehicles.

b) 12% (6% CGST & 6% SGST)

i) Other than those mentioned above.

Further, as per Notification No. 1/2018- Compensation Cess (Rate), shall be NIL on such Supply.

B. If Motor Vehicle purchased on payment of tax and input tax credit as defined in Section 2(63) of the Central Goods and Services Tax Act, 2017, CENVAT as defined in CENVAT Credit Rules, 2004 or the input tax credit of Value Added Tax or any other taxes paid, on such goods has been availed by the Supplier, then the above mentioned provisions shall not be applicable. The taxability shall arise as per below mentioned provisions and rates:



    

  1. Rates as applicable on supply of New Motor Vehicle based on Sales Consideration received by Supplier.
    2. 

  2. Further, Compensation Cess shall be applicable in this case as per the rates notified.
    3. 



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