Wed Dec 25 06:42:18 UTC 2024: ## GST Council Clarifies Used Car Taxation: 18% Tax on Dealer Margin

**NEW DELHI, [Date]** – The Goods and Services Tax (GST) Council has clarified the taxation of used cars, announcing that registered dealers will continue to pay 18% GST, but only on their profit margin, not the entire sale price. This follows recommendations from the 55th GST Council meeting held in July 2024, aimed at streamlining the sector and ensuring fairness.

Previously, the application of the 18% GST on used cars had caused some confusion. The new clarification emphasizes that the tax applies only to the difference between the dealer’s purchase price and selling price of a vehicle. This “margin value” approach ensures that only the dealer’s profit is subject to GST.

For example, a dealer buying a used car for ₹100,000 and selling it for ₹110,000 would pay GST on the ₹10,000 profit.

The Council’s recommendations aim to create a more uniform and transparent system, promoting compliance and growth in the pre-owned car market. The changes are seen as a positive step for both buyers and sellers, offering greater clarity within the GST framework. The government’s commitment to refining the tax system reflects its broader goals of fostering economic growth and environmentally sustainable practices within the automotive sector.

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