• Taxes implemented on a car (from car manufacturer to dealer to buyer)

Hi,
I do have a query for my project submission and to avoid any calculation error, I am seeking a detailed reply from experts.

I just want to know that after GST -

1. How many taxes (and how many times) are imposed on a car, from a Car manufacturer to a car dealer and then to a car buyer?

Please consider Rs. 1 Lakh as the cost of a car, which includes the profit of the manufacturer.
What will be the taxes (rates) on a Car dealer in the same state of manufacturer (Let's take UP) and in the different state of the country (Lets take M.P.)? Please take 10% profit for a car dealer.

2. Is there any double taxation of tax exemption, which can later be claimed by the Manufacturer / Dealer / Buyer??

3. Some company (like Mahindra) appoints Super Stockist (SS)in the Automobile industry. If they earn 1% of the stock billed, how much taxes are imposed on them (SS)?

Please do cover all 3 queries. An excel sheet with data is welcome.

Regards!!
Ved Sindhu
Asked 5 years ago in GST

under GST there is 28% GST + cess depends on the Car /SUV imposed at every supply & ITC is claimed by the respective buyer on further sell i.e. total GST gone to Govt will be 28%+Cess on the final price paid by the end user no cascading effect in GST

Nitin Jain
CA, Jaipur
214 Answers

4.7 on 5.0

Hi,

Tax rate on Car is 28% however Cess Rate differ base on Types of Car like Basic Model, Sedan, SUV or Luxury cars all have different rate of Cess from 1% to 20% and it is sane all over India.

After GST is applicable Only One tax GST is leviable on Car at each stage from manufacturer to dealer to retailer.

However Dealer will get full credit for the Taxes charged by company so effectively Tax will not increase the cost for the dealer.

So in your case Manufacturer will charge Tax of Rs. 29000 to 48000 on Price of Rs. 100000 depend on Types of Car but cost to the dealer would be Rs. 1 lakh only.

So if dealer will add profit 10% then selling price for dealer would be 1.10 lakh and tax amount will be 31900 to 52800 so for buyer the car price would be 141900 to 162800.

There is no any double taxation on Car under GST.

For super stockists Tax amount would be 18% of bill amount.

Narendra Sonagra
CA, Ahmedabad
57 Answers

Not rated

Hi,

- Cars are subject to GST@28% and maximum compensation cess@ 22% depending on the CC and length of the Car.After the roll out of GST, only one tax i.e. GST is applicable on Car.

- In case of B2B transactions i.e. business to business, GST is applicable on value addition only and every B2B transaction ultimately converts into B2C transaction i.e. business to consumer so the entire tax is paid by the end consumer only.

- In case of inter-state or intra-state transfer, GST is same but system of collection of GST is different. In Inter-state it is IGST otherwise it is CGST/SGST.

Thanks

Vivek Kumar Arora
CA, Delhi
4825 Answers
1030 Consultations

5.0 on 5.0

Hi,

Please find below the reaponae to your queries

1.Cars are subject to GST@28% + cess depending on the Car. ITC is claimed by the respective buyers on further selling and so there is no double taxation.

2. No double taxation

3. GST will be the same but the methodology of collection is different.

Regards,

Nikhil.

Nikhil Khanna
CA, Mumbai
1429 Answers
19 Consultations

4.8 on 5.0

Hi Sindhu,

Hope you are doing well !

1. GST@28% will be levied on cars + cess depending on the type of Car.

2. There is no any double taxation of tax exemption on car under GST.

3. GST will be the same but system of collection of GST is different. In Inter-state it is IGST otherwise it is CGST/SGST.

Thanks & Regards,

Payal Chhajed

Payal Chhajed
CA, Mumbai
5188 Answers
288 Consultations

5.0 on 5.0

GST @ 28% is applicable on cars. Itc is available is each stage so final burned of tax will be on end user. No double taxation will be there.

Swati Agrawal
CA, Mumbai
1146 Answers
7 Consultations

5.0 on 5.0

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