Sales of Used Car by a company held as fixed Asset, Goods and Services Tax - GST

[Senthilkumar M]

Sir/Madam,

Our company is preparing to sell one of the used cars recorded in the books as a fixed asset.

By applying the marginal scheme, the selling price (10000) is less than the written down value (WDV) of 15,000, resulting in a negative margin (5000).

Our Doubt

For the purpose of billing, either an Tax invoice or a bill of sale is to be issued?

Procedure for filing GSTR-1 for the specified sale?

Regards,

Senthilkumar

 

 

 

Posts / Replies

[Ganeshan Kalyani]

WDV as per Income tax Act to be worked out. Then compare it with the sale value.

For invoicing, you can raise tax invoice with no tax in it.

Further, no need to furnish the detail in GSTR-1.

[YAGAY andSUN]

In the case of selling a used car (fixed asset) under the marginal scheme where the selling price (₹10,000) is less than the WDV (₹15,000), resulting in a negative margin (₹5,000), the following points address your doubts:

1. Invoice to be Issued – Tax Invoice or Bill of Supply?

Since no output tax is payable due to negative margin under the marginal scheme as per Rule 32(5) of the CGST Rules, and the supply is exempt from tax, a Bill of Supply should be issued instead of a tax invoice.

A Tax Invoice is issued only when GST is chargeable. In your case, no GST is payable (as there is a negative margin and no tax liability), so a Bill of Supply is the correct document.

2. GSTR-1 Filing Procedure for This Sale

Since no GST is payable and the transaction results in a negative margin, there is no requirement to report this transaction in Table 12 of GSTR-1 (HSN summary) or in Table 6 (B2C) or Table 4 (B2B), depending on the nature of the buyer.

However, to maintain accurate turnover records, it is advisable to report the outward supply as an exempt supply, either in:

Table 8 of GSTR-1 (if the buyer is unregistered and the value is below threshold), or

Table 8A/8B (Nil Rated/Exempt/Non-GST outward supplies), indicating the sale as an exempt supply under the marginal scheme.

Conclusion: You should issue a Bill of Supply (not a Tax Invoice), and the transaction should be disclosed under the exempt/nil-rated section of GSTR-1, ensuring compliance with the marginal scheme under Rule 32(5).