If you buy and sell second-hand goods, such as used cars, GST can be paid on your margin instead of the full sale price, when the conditions are met. We check whether you qualify and work out the value for every sale.
Who this is for
- Dealers in used cars and two-wheelers
- Traders in second-hand goods, such as furniture or machinery
- Dealers who resell goods as they are, or after minor repairs
What we do
- Confirm whether your goods and purchases qualify
- Work out the taxable value of each sale: selling price minus purchase price
- Keep the records that support the valuation
- Report margin-scheme sales correctly in your GST returns
- Confirm the current rate for your goods before you invoice
How the value is worked out
Example: you buy a used car for ₹4,00,000 and sell it for ₹4,50,000. GST is charged on the ₹50,000 margin, not on ₹4,50,000. If you sell for less than you paid, the margin is treated as nil.
- The goods are sold as they are, or after minor processing that does not change their nature
- No input tax credit was claimed on buying those goods
- A negative margin is ignored
Rates for used vehicles changed with the September 2025 GST rate revision, so we confirm the rate for your vehicle class before you invoice. The GST Council’s October 2026 recommendations also clarify input tax credit for used-car dealers; they apply once notified. Source: CGST Rules, rule 32(5).
Documents to keep ready
- Purchase documents for each item, showing the price paid
- Sale invoices
- Proof that no input tax credit was claimed on those purchases
- Vehicle papers, for used-vehicle dealers
How it works
- Share documentsSend them on WhatsApp or email. We tell you if anything is missing.
- We prepareWe check the figures and draft the filing.
- You approveNothing is filed until you say yes.
- FiledYou get the acknowledgement and a reminder before the next due date.
Questions people ask
Can I claim input tax credit under the margin scheme?
Not on the second-hand goods you value under the scheme; that is a condition of the rule. Credit on other business expenses is a separate question, which we check for your case.
What if I sell below my purchase price?
The margin is treated as nil, so no GST is payable on that sale.
Does the scheme cover all second-hand goods?
It covers goods bought and sold as they are, or after minor processing that does not change their nature. Goods remade into something different do not qualify.
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