The GST Council has recommended an increased 18% tax rate on used car sales of electric vehicles (EVs), along with specified petrol and diesel cars

The 18 per cent GST would not be applicable if an individual sells old and used car to another individual. If a GST registered person has claimed depreciation, the tax is payable only on the value representing the margin.

While an individual seller need not pay 18 per cent GST when selling his or her car, there are several grey areas which remain.

As the country was busy figuring out the increased tax on caramelised popcorn, the 18 per cent Goods and Services Tax (GST) on selling old vehicles has grabbed eyeballs, with many discussing it how it would affect them.

The GST on the margin of sale for used vehicles, including electric ones, has been revised to 18%. GST is payable only on the margin between purchase price and sale price. For depreciated vehicles, GST applies only if the sale price exceeds the depreciated value.

Registered sellers must pay GST on the sale of old and used vehicles only if there is a positive margin, meaning the selling price exceeds the depreciation-adjusted cost of the vehicle. If the margin is negative,