Would the Sale of a Personal Car be Taxable under GST?

To determine the taxability of the sale of a personal car, one must first determine whether it is a supply as defined under the GST Acts.

“Supply” is defined under Section 7 of the Act, and one of the key factors for it to be a supply is that it has to be in the course of furtherance of business.

Business, which is defined under Section 2(17), includes any trade, commerce, manufacture, profession, vocation, adventure, wager, or any other similar activity. It also goes on to say, amoung other things, that such transactions will be supply, whether or not they are one-off transactions.

So since the sale of a personal car would come under a one-off transaction, would it be a supply under GST?

The answer lies in Section 7 itself, where it mentions that it should be in the course or furtherance of business, and this transaction is not business, as it is neither trade nor commerce.

On 13 July 2017, in order to clear doubts raised by registered jewellers, whether the supply of personal jewellery by customers to them would be a taxable supply, CBIC issued a Press Release (Release ID: 167405), which clarified that even though the sale is for consideration, it is not “in the course or furtherance of business” for the individual. Therefore, it does not qualify as a “supply” under Section 7 of the Act.

Though this was issued for the jewellery, the situation in the present case is similar and therefore can be extended to the sale of a personal car as well.