ITC on Input Services & Capital Goods on Second Hand Goods/ Margin Scheme Under GST? Allowed Or Not?

AUTHORITY FOR ADVANCE RULINGS, KARNATAKA

M/S. ATTICA GOLD PRIVATE LIMITED
Dated: - 27-10-2022

#Input Tax Credit #under Marginal Scheme #under Marginal Scheme #Rent #Advertisement expenses##commission #Professional expenses #other like expenses #credit onCapital Goods #Applicant under #taxable supply#person dealing #second hand goods #value of supply #selling price #rule 32(5) #no restriction #Eligibility #section 16 of CGST Act 2017 #(Rule 32(5) of CGST Rules) #section 16 to 21 # rules 36-45 #Section 97 #Rule 104 #FORM GST ARA-01 #Section 97(2) #Notification No. 10/2017 #

[ankurarya]

Thankyou Sir for sharing your valueable knowledge with us🙏..

[sushantsourav]

IMHO, the point raised by you of business of Pre-Owned Cars is a very pertinent one - and the answer will depend on the way business has been organized and terms of contract b/w the seller and buyer and dealer acting as an intermediary. I do not think the dealer acquire the pre owned item as business inventory before ultimate sale. The revenue will be of only intermediary service...but I need to analyze some more..more on the GST side than the accounting side.

[nimeshagarwal]

Sir, I have a couple of query related to margin scheme

1. What will be the turnover? The margin or the transaction amount?
If Margin amount is treated as "value of supply" as per rule 32(5), then
A. Won't it always create a difference in turnover between I.T audit report and thereby in GSTR9C?

2. How does the invoice look like in this case? Because as per my understanding, It won't make sense to issue tax invoice to the customer which would clearly indicate the profit of the dealer (margin on which GST is charges) to the customer.

Can you share a sample invoice?

[rohit.adv]

I have One question sir,
If a person dealing in sale of old cars, then when he be liable to get himself register in Gst.

[TheMotorman]

Sir I am a registered GST Dealer...I am a factory owner and i have a car which I have capitalised in my books of account...I purchased the car in 2016...Now when I am selling the car to a showroom i get a profit of 50000, which is a positive margin..Now will 18% GST will be applicable on the positive margin? and shall I issue tax invoice for the same to the car showroom?