Discounted Sale Price Scheme
According to this scheme, if you’re selling a used or a second-hand vehicle, you can use 50% of the price you’re selling the vehicle at and apply GST on it. You can exercise this scheme, without seeking consent from IRAS.
How do You Account for & Report GST?
You should levy GST charges on 50% of the SP (sale price) & report the output tax as well as the value in relation to supply which is standard-rated when you file your GST return.
Who Should Opt for This Scheme
- If you are a non second-hand dealer of motor vehicles, you can use this scheme when you occasionally put your vehicle on sale. However, you can use this scheme only if the said vehicle was used during the course of your business.
- If you are a second-hand dealer of motor vehicles, you can use this scheme during the following scenarios:
- You made a GST claim previously on a vehicle purchase and hence you don’t qualify to exercise the Gross Margin Scheme or
- Your client has registered for GST. In such an event, selling your vehicle as per the Discounted Sale Price Scheme permits your client to make a claim for GST charges incurred provided it is a vehicle which is meant for commercial usage (will be subjected to input tax claim conditions).
You can also levy GST charges on a second-hand motor vehicle via the Gross Margin Scheme.
Other Schemes Available