Sir our client is in business of Transportation &
Construction. Our Clint has purchased Tanker (Vehicle) in year 2008 during that
time credit on capital goods was not allowed.
Now my client wants to sale the tanker, so kindly advice us on
the same regarding GST on it.
As per Schedule II CGST Act, Para 4(a)
transfer of business asset will be treated as supply of Goods. Where goods
forming part of the assets of a business are transferred or disposed of by or
under the directions of the person carrying on the business so as no longer to
form part of those assets, whether or not for consideration, such transfer or
disposal is a supply of goods by the person.
For invocation of above
provision three conditions to be satisfied:
goods forming part of business assets;
or disposed of so as no longer to form part of business assets;
3) by or under the directions of the person
carrying on the business
The way this provision is
drafted in the act makes its applicability very wide. When above conditions are
satisfied GST is payable at the applicable rate for that asset on the value
determined under section 15 of CGST Act. It does not matter whether transaction
is done for consideration or without consideration, ITC has been availed on
those goods or not, Goods belong to pre GST era or post GST era. The Para
refers to assets of a business which may be current assets or fixed assets.
Therefore this Para applies to both whether capital goods or other goods.
Therefore GST should be charged on sale of old
used capital goods.