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GST on sale of old car

Meaning of second-hand goods under GST

The GST law does not define second-hand goods. Also, none of the other laws including Excise, State VAT Laws have defined second hand goods.

Looking at the definition of Goods, Section 2(52) of the Central Goods and Services Tax Act states that

"goods means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply".

Hence second hand goods, since not specifically excluded in the definition, are included in the definition of goods and the GST law shall apply to old goods in the same manner as it applies to new goods.

Levy of GST on sale of old car

As per Section 7(1) of the CGST Act, the expression supply includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business.

Therefore, supply of old car made for a consideration in the course or furtherance of business shall be taxable under GST law and all the provisions of GST law shall be applied to such supply.


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TaxGyata Team

TaxGyata Team