The Goods and Services Tax (GST), which was launched in India in July 2017, is an indirect tax applicable to the supply of all the taxable goods and services. The sale of used and old vehicles in India is also considered a taxable supply under GST. Read this article to know the impact of GST rate on used vehicles\/cars.<\/p>\n
In addition to GST, a CESS tax is also applied to the sale of both old and new vehicles. The rate of cess may vary from 1% to 20% depending on the type of vehicle and sales conditions. However, in its 25th meeting, the GST council had ordered to remove cess from the supply of used vehicles. More on that later.<\/p>\n
Before GST was implemented, the sales of old and used cars were applicable to a number of indirect taxes<\/a>, including sales tax, VAT, excise duty and cess. The overall tax rate on the supply of used vehicles was in the range of 25-50% before GST.<\/p>\n When GST was launched, all the existing indirect taxes were subsumed into one good & services tax.<\/p>\n At the time of the GST launch, the rate of GST on used cars was 28%, the same as the GST rate on the supply of new vehicles. Also, there was a cess of 15%, taking the effective tax rate to 43% on the supply of used\/old cars.<\/p>\n GST on sale of Used Vehicles (Before 18\/01\/2018) – 28% (GST) + 15% (Cess)<\/em><\/p>\n However, the GST Council, in its 25th meeting held on January 18, 2018, decided to cut tax rates on a number of products & services, including the sale of old and used cars. Post that, GST rate on used vehicles sale was reduced and cess was removed from such supplies.<\/p>\n Current GST Rate on Supply of Used Vehicles:<\/strong><\/p>\nAfter GST: Tax Rate on Used Cars<\/h2>\n