[volkman10]

GST Council hikes tax on sale of used cars from 12% to 18%

The GST Council decided to increase taxes on sale of old and used cars, including EVs, from 12 per cent to 18 per cent.

Link:

[Nilesh5417]

Originally Posted by volkman10

GST Council hikes tax on sale of used cars from 12% to 18%

The GST Council decided to increase taxes on sale of old and used cars, including EVs, from 12 per cent to 18 per cent.

Link:

Nothing changes for individuals.

The finance minister said the council decided to raise the rate of tax to 18 per cent from 12 per cent on all used EV sales, just as in case of non-electric vehicles, and it will be applicable only on the value that represents margin - the difference between the purchase price and selling price (depreciated value if depreciation is claimed) - by businesses.

Sale and purchase of used vehicles by individuals will continue to be exempt from GST.

[TusharK]

The GST Council has decided to increase the tax on the sale of used cars, including electric vehicles, from 12% to 18%.



The GST will be applicable only on the value that represents the margin of the supplier, which is the difference between the purchase price and selling price (depreciated value if depreciation is claimed). The sale and purchase of used vehicles by individuals will continue to be exempted from GST.

Currently, all used vehicles, including EVs, attract 12% GST. Petrol vehicles with an engine capacity of 1,200cc or more and a length of 4,000 mm or more, diesel vehicles with an engine capacity of 1,500cc or more and a length of 4,000 mm, and SUVs attract 18% GST.

In the recent meeting chaired by Finance Minister Nirmala Sitharaman, the GST Council decided to charge a uniform rate of 18% for all vehicles.

Source: ET Auto

Link to Team-BHP News

[maddy42]

Originally Posted by TusharK

The GST Council has decided to increase the tax on the sale of used cars, including electric vehicles, from 12% to 18%.

Currently, all used vehicles, including EVs, attract 12% GST. Petrol vehicles with an engine capacity of 1,200cc or more and a length of 4,000 mm or more, diesel vehicles with an engine capacity of 1,500cc or more and a length of 4,000 mm, and SUVs attract 18% GST.

In the recent meeting chaired by Finance Minister Nirmala Sitharaman, the GST Council decided to charge a uniform rate of 18% for all vehicles.

Source: ET Auto

Wow - being taxed on death is remaining. Every time the GST org meets, there is more complication to our taxation rather than rationalization. Sorry to state this but our babus really need to simplify and not complicate things further which will lead to more folks storing their money in black.

[FrozeninTime]

Increase in GST for used cars is to disincentivise purchase of old and used cars so that government meets it's zero carbon target of 2070. It's going drive cost of used cars up.

Slightly off topic:
A totally questionable move in the increase in GST rate on fly ash bricks which is eco friendly.

[kdp]

Originally Posted by FrozeninTime

Increase in GST for used cars is to disincentivise purchase of old and used cars so that government meets it's zero carbon target of 2070. It's going drive cost of used cars up.

Not really. it's a market economy and the purchaser's willingness to pay for a used car as percentage of a new car price is relatively fixed (car age and condition is an (inverse) coefficient to that percentage). This will 1. either drive down margin for used car dealers and/or 2. Drive down resale realization for car owners looking to sell, especially corporates.

[07CR]

Originally Posted by TusharK

Currently, all used vehicles, including EVs, attract 12% GST. Petrol vehicles with an engine capacity of 1,200cc or more and a length of 4,000 mm or more, diesel vehicles with an engine capacity of 1,500cc or more and a length of 4,000 mm, and SUVs attract 18% GST.

I don't quite understand this. I recently sold my Seltos 1.5 GT line Turbo P and Sonet iMT HTX 1.0. With both cars I suffered a loss, i.e. purchase price was 23.5L and 11L and selling price was 19~L and 9 L respectively. But I didn't pay any kind of tax then.

Will this be applicable in future, considering I am actually making a loss selling a car considering it's a depreciating asset?

[rdhawan15]

Originally Posted by volkman10

GST Council hikes tax on sale of used cars from 12% to 18%

The GST Council decided to increase taxes on sale of old and used cars, including EVs, from 12 per cent to 18 per cent.

Link:

There are 2 thing to understand:

1. GST on used car sale is not going to affect individual sales

2. Used car dealers will have to pay the GST at 18 percent on the margin they make. So, if somebody buys a used car for 200000 and sells it for 250000, the GST liability will be 18 percent of 50000 or Rs. 9000.

3. Prior to this revision, the User car dealers would have paid Rs. 6000 in GST. So, the tax liability of Used card dealers will increase after the latest revision.

I understand that a lot of noise is being made about this revision. But, it does not affect the common people per se.

[NomadSK]

Originally Posted by 07CR

I don't quite understand this. I recently sold my Seltos 1.5 GT line Turbo P and Sonet iMT HTX 1.0. With both cars I suffered a loss, i.e. purchase price was 23.5L and 11L and selling price was 19~L and 9 L respectively. But I didn't pay any kind of tax then.

I guess you missed this point. Looks like this diktat is for dealers or business guys who deal in used cars, Like cars24, spinny etc.

Originally Posted by TusharK

The sale and purchase of used vehicles by individuals will continue to be exempted from GST.

[Turbanator]

I believe this has more to do with uniformity than anything else. Smaller capacity vehicles were being taxed at 12 % and the higher ones at 18%, and this ruling stopped the differentiation. This is per my understanding.

This ruling seems to be for aggregators, who will say buy a car at 10 Lac and sell for 12 Lac, earlier they were paying 12% or 18% of 2 Lac based on the type of vehicle. But now they will have to pay 18% of 2 Lac irrespective of the type/size of the vehicle. So, technically, used cars will get expensive as such companies will have to pass that increase to the buyer.

[NomadSK]

Originally Posted by rdhawan15

I understand that a lot of noise is being made about this revision. But, it does not affect the common people per se.

I guess at the end of the day, it will hit the pockets of the common people when dealers will start raising the prices of the used cars accordingly. Government, babus, dealers all will dance on the tax payers money of "common people". Every time Nirmala ji goes for GST meeting, I become jittery.

Originally Posted by Nilesh5417

Is Cars24 any better when it comes to prices they offer?

In my case, No. We had a 2014 corolla, around 36000, something on the ODO and they were offering me 2L. We kept the car a bit longer, till a known guy came and bought the car for just above 4L. Both were happy, he got a clean car, we got the money what car deserved. It's better to sell among knowns than on online platforms, the only caveat is you should have time and patience.

[ToThePoint]

Originally Posted by rdhawan15

I understand that a lot of noise is being made about this revision. But, it does not affect the common people per se.

Do you think the dealers will pay the extra outgo from their pockets?

[07CR]

Originally Posted by NomadSK

I guess you missed this point. Looks like this diktat is for dealers or business guys who deal in used cars, Like cars24, spinny etc.

So is this for only organised sector players like the above mentioned or even local car dealers?

[BullettuPaandi]

Originally Posted by Turbanator

So, technically, used cars will get expensive as such companies will have to pass that increase to the buyer.

...and the good old double dipping as well- asking at a lower price from the seller, stating they won't be able to sell at such a high price incl. 18% GST, which they'll then definitely proceed to do.

At least in TN, sub-4m <1200cc cars, let's take the popular Swift for instance, are already over-priced if they're from aggregators, and most such cars sales are carried out between individuals/brokers. Selling such cars via an aggregator is already a 'take it or leave it' situation the seller faces. Aggregators know they have a bit more leverage on sellers, who are looking for a direct sale, than buyers who walk in for the ease of browsing and can just as easily walk out, knowing they can damn well find it cheaper even with brokerage.

[SixPistons]

I think they should just put 100% tax on pre-used vehicles and call it a day. Kill the used car market altogether instead of giving it a slow death. I mean if that’s how the government is going to encourage folks to buy new cars then they might as well just tax them the same as the value of that pre-used car.