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  1. Deshmukh Samir
  2. Second Hand Cars
  3. Tuesday, December 12 2017
Dear sir

I am also facing the same issue. My employer has a leased company as a group company which provides vehicles to employees on 4 years of lease but if employee left comany prior the this period the he/she needs to pay the rest amount.

In my case, employer is saying that GST is applicable on resale of vehice and the car value is exceeding thE showroom price even.

Also the total cost of the car was 16 lacs where the employer paid 10 lacs and remaining was paid by me

What’s the impact of GST here?



Please reply
  Mumbai, Maharashtra, India
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san Accepted Answer
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I took a CLV in Feb 2018, I was eligible for car with ex-showroom price 13L but I purchased the car with ex-showroom price around 16L by paying the differential amount. I am buying back the car after 1 Year. Now the leasing company is asking me to pay the GST and CESS as applicable on new car, this makes the car price almost same as new Car. Please suggest asap.


  1. more than a month ago
  2. Second Hand Cars
  3. # 1
Raja Accepted Answer
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I am also facing the same issue, I availed car from my employer and the employer purchased a new car on loan, the car was registered on company's name. I paid the down payment money for the loan to my employer and the employer is paying the emi from my car allowance. Now I am leaving the company and my employer is asking me pay the gst on top of the downpayment+foreclosure value.

Thanks!!!
  1. more than a month ago
  2. Second Hand Cars
  3. # 2
Deshmukh Samir Accepted Answer
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Thanks a ton... genuinely great help...

Really appreciate it

Regards
  1. more than a month ago
  2. Second Hand Cars
  3. # 3
Admin Accepted Answer
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Hello,

GST is not applicable on buying Car from Company and neither company has to pay.
Only in cases where the car is rather financed from a leasing company, then in order to terminate the contract - GST and applicable charges needs to be paid in.

Been in your case as you mentioned that the company purchased brand new car, it does not look like leasing case
As clearly referred by by Dr. Hasmukh Adhia (Revenue Secretary) - For Second Hand Cars, GST will apply only on cars sold by registered vendors (essentially known as Used Car Dealers or Car Showrooms

Refer explanation and details on - GST Liability on Selling Car by Companies

Should help !!


  1. more than a month ago
  2. Second Hand Cars
  3. # 4
Deshmukh Samir Accepted Answer
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More details needed
> Is the car on Lease and you making a buy back from Lease company

- As per the bank policy I was eligible for a car for 10 lacs which is part my compensation. The car is registered in company’s name and after 4 years it is transferred to employees name.

> What is the amount your company asking you to pay off. What was the original invoice cost

The company is asking me to pay WDV 10% less thn original amount plus the GST on the fair value of the car


> How old is the Vehicle

Vehicle was bought in March 2017 and VAT was paid as the GST wasn’t applicable that time .

> What is the contract detail in case employee quit the company in terms of amount to be paid back

As per the policy, if the employee quits before 4 years... he has an option to buy back at WDV or surrender the car. In this case I had bought the car over and above my limit of 10 lacs and remaining amount was funded by me.

Now company is asking me to get the fair value of the car and pay GST on the entire amount... which is more thn the actual invoice cost of the car.

Kindly assist
  1. more than a month ago
  2. Second Hand Cars
  3. # 5
Admin Accepted Answer
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Hello,

More details needed
> Is the car on Lease and you making a buy back from Lease company
> What is the amount your company asking you to pay off. What was the original invoice cost
> How old is the Vehicle
> What is the contract detail in case employee quit the company in terms of amount to be paid back

Pl confirm on above to assist
  1. more than a month ago
  2. Second Hand Cars
  3. # 6
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