Car Forum - Ask & Answer Questions

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  1. Manish
  2. Second Hand Cars
  3. Monday, August 05 2019
Scenario -
Employer buys a Car on loan for 4 years for office use.
Employer pays off the entire Car loan in 4 years and takes Depreciation benefit for these 4 years each year. After 4 years the car value is reduced to written down value of a negligible value because of straight line method depreciation. Can the Employer sell this Car to Employee at the actual written down value after 4 years?
Or has to sell this Car at Fair market value to Employee, which is higher even when the WDV is low?
Will this sale transaction attract GST or any other Tax?
Admin Accepted Answer

Employer can well sell car at fair market price
There is no as such clause to sell car at WDV method as WDV is for income tax benefits and not applicable on transaction in real life

GST is not payable as selling cars is not the business of firm
However, the sale transaction will yes be shown by company in books of accounts.

  1. more than a month ago
  2. Second Hand Cars
  3. # 1
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