Second-hand car sales tax: Is 18% GST really imposed? Find out here!
A social media rumor claims that selling a used car will incur an 18% GST on the loss margin, following a GST Council decision to levy 18% GST on used electric car sales. This post clarifies the reality behind this claim.
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Concerns arise about the increased burden on individuals due to the new GST rule. Social media posts claim selling a car for less than its purchase price would lead to a substantial GST payment on the loss, making it better to give the car away. This misunderstanding highlights the need for accurate information.
The Reality: 1. Direct car sales between individuals are GST-exempt. 2. Only used car dealers pay 18% GST, not on the total resale amount, but on the profit margin. For example, if a dealer buys a used electric car for Rs 8 lakhs and sells it for Rs 9 lakhs, the 18% GST applies only to the Rs 1 lakh profit margin.
Opinion: The current GST system in India has flaws. While Ease of Doing Business rankings improved, the ground reality is different. Excluding alcohol and petroleum products from GST while citing states' opposition raises questions. Changing the Finance Minister and simplifying GST and income tax are crucial for the Modi government's re-election.
