[Santoshbhat]

Originally Posted by rugsrags

Dear Santoshbhat thank you so much for your clarification and I'll discuss this with my ca too but isn't there a caveat that the registered dealer would be the one in the business of buying and selling used cars? Since this is not what my companies normal business is won't that be a cause of contention?

Also when you did sell your company car you charged no gst wasn't there any objection from the auditors since they're telling me that this same clause is applied to used machinery too and a car falls in the same category so gst has to be charged regardless! Going by what they say an invoice apparently can not be raised with no gst!!

I know there is solid confusion. I too have spent hours on the internet searching for answers. My logic is, since we are not in the business of buying and selling cars, we are not allowed input credit on motor cars. In fact we have bought our cars under the previous regime by paying all kinds of duties and VAT. Now when we are selling the used car, how can they expect us to pay full tax again? On used machinery its a different story since we have taken input credit. Anyhow there is still a lot of confusion and I am sure your CA is taking the safer route by suggesting you to pay full tax.

Did some study again. Basically the clarification talks of margin scheme for people in the business of buying and selling second hand goods. Used car dealers fall in this category and we don't , I suppose. In my case I did raise an invoice charging full tax. This was in October, the returns for which is being filed today . I was arguing with my CA to rectify it and make an invoice with NIL GST. I had another discussion with him right now and as things stand, your CA is right - full tax needs to be charged. In my case the car was literally run to ground and sale value was peanuts. I hope a logical clarification and notification is issued soon. It is criminal to double tax an item like this.

Edit : Here is an article by a CA on this subject. https://idt.taxmann.com/topstories/1...ome&Page=CIRNO

This is how these cases are going to be fought. I am sure in the coming years there is going to be a lot of litigation between the Govt. and tax payers and until courts start giving out their verdicts, confusion will reign.

[k88k]

This relates the 20K Kms service of my Celerio, which I had got done yesterday. Just noticed that MASS service centre has applied pre-10th Nov '17 rates to part cost. Wasn't the revised GST rates effective from 15th Nov '17?

Certain HSN codes in the bill break-up feature in the 178 goods whose rates were revised and have seen a downward revision in taxable percentage.

Have raised this concern with the service centre and have been assured a response after they check with Maruti. Can anybody confirm whether the effective date have been revised?

Mods: Request to move this post to the suitable section if it doesn't fit here.

[rugsrags]

Has there been any clarity on the GST rates to be charged or any clarification from the government on the issue yet?

[Arjun Reddy]

The ordinance now becomes a bill.

http://profit.ndtv.com/news/economy/...akamai-rum=off

[anandpadhye]

What's the actual impact of yesterday's GST bill in loksabha? Are the car prices going to increase? And effective when?

[Arjun Reddy]

Originally Posted by anandpadhye

What's the actual impact of yesterday's GST bill in loksabha? Are the car prices going to increase? And effective when?

Status quo on the prices. It was hiked by an ordinance. An ordinance is a temporary decision which needs to be passed in the parliament as a bill to give it a full legal amendment status.

[anandpadhye]

Originally Posted by Arjun Reddy

Status quo on the prices. It was hiked by an ordinance. An ordinance is a temporary decision which needs to be passed in the parliament as a bill to give it a full legal amendment status.

Are you sure?
Current tax on sedans is 28% GST + 15% cess, IIRC.
What they passed in LS yesterday us 28% GST + 25% cess!

Or, am I missing anything?

[sparky@home]

GST revenues have failed to achieve the targets especially after politically driven sops are being declared for every election. Luxury cars, a token of affluence, have always been a soft target for ‘tax the rich’ ideology and they have been shot once again. The parliament, yesterday, tabled a bill to increase the additional cess on luxury cars from 15 per cent to 25 per cent over the base 28 per cent slab, taking the overall taxation to 53 per cent. The increase in cess defeats the ethos of GST aimed at uniform taxation with continued dilly-dallying by the authorities. This is the second hike in GST for luxury cars since its implementation six months ago. While the bill is yet to be passed by the Rajya Sabha, any chances of reduction in the proposed hike seem bleak. The only saving grace is that the new taxation of 53 per cent is just a shade lower than the 55 per cent taxation before the GST ruling. We can expect stiff resistance from SIAM and all quarters of the automotive industry who are already fighting the long battle for tax sops on hybrid cars.
By definition, luxury cars include everything from the D-segment sedans like the Toyota Camry all the way to Mercedes-Benz, Audi, BMW, Jaguar, Land Rover, Lexus, Volvo and the uber premium ones like Rolls-Royce, Bentley and their likes.
Source :
https://www.carwale.com/news/gst-woe...ore-tax-32441/

[Arjun Reddy]

@sparky@home, this is nothing new. This particular bill is not another hike, they are just ratifying an ordinance that was passed to hike the cess. The current tax rates will continue.

[sparky@home]

I only hope it does not become the case of killing the golden goose. The luxury car makers are as it is giving stiff opposition.

[Swapnil4585]

I don't understand one thing. Why are people below turnover 20 lac and 10 lac being exempted from the purview of the tax? These people anyhow don't benefit from this exemption and also a large ambit of turnover is kept out of the circle due to this limit. It's time to bring in compulsory registration from turnover of Re 1/-.

[Swapnil4585]

Originally Posted by Santoshbhat

I know there is solid confusion. I too have spent hours on the internet searching for answers. My logic is, since we are not in the business of buying and selling cars, we are not allowed input credit on motor cars. In fact we have bought our cars under the previous regime by paying all kinds of duties and VAT. Now when we are selling the used car, how can they expect us to pay full tax again?

We had the same provision here in Maharashtra too. Pay VAT on purchase of car meant for personal use, don't take its set off and collect and pay VAT while selling the car.

The logic behind this is that since a car (registered in white plate) is not meant for business purpose, set off of the VAT paid at the time of its purchase is not allowed (you may want to refer to the restrictions on set off sections and rules in the VAT law). However, when you're selling a taxable good (irrespective of whether it is used in business or not), you have to collect and pay tax. The same law is followed in the Good and Simple Tax too.

Originally Posted by k88k

This relates the 20K Kms service of my Celerio, which I had got done yesterday. Just noticed that MASS service centre has applied pre-10th Nov '17 rates to part cost. Wasn't the revised GST rates effective from 15th Nov '17?

The Good and Simple Tax Council, in some of its earlier meetings, used to declare rate cuts or rate hikes on media during the meets, and their corresponding notifications used to come after 10 days - two weeks. This time round, they announced it in the meeting itself, that the rate cuts would be applicable from 15/11/2017. Hence, Maruti should have charged you the rates applicable as on the date of raising the invoice.

[Santoshbhat]

Originally Posted by Swapnil4585

We had the same provision here in Maharashtra too. Pay VAT on purchase of car meant for personal use, don't take its set off and collect and pay VAT while selling the car.

The logic behind this is that since a car (registered in white plate) is not meant for business purpose, set off of the VAT paid at the time of its purchase is not allowed (you may want to refer to the restrictions on set off sections and rules in the VAT law). However, when you're selling a taxable good (irrespective of whether it is used in business or not), you have to collect and pay tax. The same law is followed in the Good and Simple Tax too.

Are you sure? In Karnataka, if a registered entity were to sell a used car the VAT payable was fixed at 5%. For new cars it was something like 14.50% VAT. Under earlier sales tax laws before VAT, any taxable good was chargeable to tax only once in each state. Second sale was exempt from tax. After VAT came into being, tax was liable to be charged at every point of sale with input credit given on purchase. But since they did not allow input credit on motor vehicles, they decided to tax it @ 5% on second sale. Under GST, they want full tax on new cars, then don't allow input credit to the buyer and then make him shell out same full tax on resale? This logic is seriously flawed and leads to double taxation of the same goods. I wonder how company owned cars are being sold right now? Esp luxury cars that are taxed at 45% odd . I hope a notification comes out soon clarifying things.

Originally Posted by Swapnil4585

The Good and Simple Tax Council, in some of its earlier meetings...

I hope you say this in a sarcastic way.

[k88k]

Originally Posted by Swapnil4585

The Good and Simple Tax Council, in some of its earlier meetings, used to declare rate cuts or rate hikes on media during the meets, and their corresponding notifications used to come after 10 days - two weeks. This time round, they announced it in the meeting itself, that the rate cuts would be applicable from 15/11/2017. Hence, Maruti should have charged you the rates applicable as on the date of raising the invoice.

I had forgotten to update on this. Thank you for your reply.

I had escalated the issue and was more than fairly compensated. . After sitting on it for a good 2-3 weeks, I got a call from the Service Centre's CRM one fine day. They admit that it was indeed a genuine complaint. I was supposed to get Rs. 56 refund for incorrect taxation in the invoice. Since the amount was too low and they refunded only through cheques, I was offered a free coupon for Wheel balancing & alignment with the service centre. They were courteous enough to send a service centre person to my home to deliver the coupon as well.

[rugsrags]

Originally Posted by Santoshbhat

Are you sure? In Karnataka, if a registered entity were to sell a used car the VAT payable was fixed at 5%. For new cars it was something like 14.50% VAT. Under earlier sales tax laws before VAT, any taxable good was chargeable to tax only once in each state. Second sale was exempt from tax. After VAT came into being, tax was liable to be charged at every point of sale with input credit given on purchase. But since they did not allow input credit on motor vehicles, they decided to tax it @ 5% on second sale. Under GST, they want full tax on new cars, then don't allow input credit to the buyer and then make him shell out same full tax on resale? This logic is seriously flawed and leads to double taxation of the same goods. I wonder how company owned cars are being sold right now? Esp luxury cars that are taxed at 45% odd . I hope a notification comes out soon clarifying things.



I hope you say this in a sarcastic way.

There is a notification that has come out. The base rate has been reduced to 18% from the previous 28% but the cess remains as on new cars so the effective rate will be around 33% ... GST is mandatory and has to be charged it's just that the govt coffers will keep increasing with no respite to the biggest tax contributors i.e the companies... I think the government only wants individuals to buy smaller cars....