Background:
The GST Council in its 55th meeting held on December 21, 2024, recommended several significant decisions aimed at tax rate changes, trade facilitation, and compliance streamlining under GST. Among the major recommendations announced, the council recommended to increase the GST rate from 12% to 18 % on sale of all old and used vehicles, including EVs other than those specified at 18% -Sale of old and used petrol vehicles of engine capacity of 1200 cc or more & of length of 4000 mm or more; diesel vehicles of engine capacity of 1500 cc or more & of length of 4000 mm and SUVs.[Note: GST is applicable only on the Value that represents Margin of the Supplier, that is, the difference between the Purchase price and Selling price (depreciated value if depreciation is claimed) and not on the value of the vehicle. Also, it is not applicable in case of unregistered persons.]
Now:
The CBIC issued Notification No. 04/2025-Central Tax (Rate) dated January 16, 2025, to amend the Central Goods and Services Tax Act, 2017 (“the CGST Act”). This amendment, authorized under sections 11(1) of the CGST Act, brings modifications to base Notification No. 8/2018-Central Tax (Rate) dated January 25, 2018 (“the Goods Rate Notification”).
In the said notification, in the TABLE, against S. No. 4, in column (4), for the entry “6%”, the entry “9%” shall be substituted.
The notification declares that these changes will be come into force with immediate effect.
Similar notifications have been passed under the Integrated Goods and Services Tax Act, 2017 (“the IGST Act”) and the Union Territory Goods and Services Tax Act, 2017 (“the UTGST Act”).
The Notifications can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2025/01/CBIC-N.No_.-04_2025-CUI-Rate.pdf
