Hello Sir One of our client is selling Plant and Machinery and need to know if GST is applicable on such sale.? Below are the details: Plant and Machinery were purchased during VAT regime, there was no input credit claimed for capital goods/plant and machinery in VAT regime since it was used for production of tax free items. We have claimed depreciation on such plant and machinery in books of accounts. Our query is - 1) Is GST is applicable on such sale of plant and machinery purchased during VAT regime and 2) If GST is applicable than on which amount we need to charge the GST?

Reply-GST is necessary to collect on sale of old plant & machinery, refer Schedule II (transfer of Business asset) of CGST Act, 2017.  It does not matter whether taxpayer has availed input tax credit or not. If there is involvement of consideration, GST will be applicable on Transaction value.

Transaction value will be the taxable value in case of sale of old plant & machinery.