If you sell business assets (including second-hand vehicles)

You will have to charge GST when you sell your business assets, for example old furniture, office equipment, or non-residential properties.

When do I need to account the GST for sale of my business assets

You must account for GST when you sell your business assets at the earliest of the following three events:

• The date when you issue the tax invoice
• The date when you receive the payment
• The date when you deliver or hand over the business assets

How should I account the output tax when I sold my business assets

GST is accountable when you sell or dispose your business assets. The output tax to be accounted for is as follows:

• If your assets have market value and you received consideration for its disposal, you need to account output tax based on the consideration you received.
• If your assets are obsolete with no market value and you do not receive any consideration for its disposal, you need not account for the output tax.
• If your assets have market value and you have given it free of charge to another person, it will be considered as a deemed supply and you need to account for the output tax. The value of the deemed supply shall be the original cost of the assets.
  • For more details on value for deemed supply, read all about "Amendment to Paragraph 8 of the 3rd Schedule to the Goods and Services Tax Act with Respect to Value of Supply of Business Assets: - a) Transferred or Disposed of at no consideration; b) At the Time a Person Ceases to be a Taxable Person (102KB)"

How do I report the sale of used motor vehicles in my GST return

Non Second-hand car dealer

• You are required to charge GST on 50% of the selling price when you sold a used motor vehicle. This is known as the Discounted Sales Price Scheme.

  Example

  You sold a motor vehicle at $50,000. GST is chargeable on 50% of the selling price i.e. $25,000. Thus GST is calculated at 7% x (50% X $50,000) = 7% X $25,000 = $1,750.
  
  You are to report the sale of the motor vehicle in your GST return as follows:

  • Box 1 (" Total value of standard-rated supplies") - $50,000
  • Box 6 ("Output tax due") - $1,750

Find out more information on "GST Guide for Motor Traders" (423KB)".

Second-hand car dealer

• You have the option of two schemes for the sales of your second-hand car:
  
  
  1. Gross Margin Scheme
     GST is chargeable only on the gross margin i.e. difference between the selling price (which is treated as GST-inclusive) and the purchase price.
     
     Before you adopt the use of Gross Margin Scheme, you must first assess your eligibility by going through the checklist on Self Review of Eligibility and Declaration on Use of Gross Margin Scheme (186KB).
     
     
  2. Discounted Sales Price Scheme
     GST is chargeable on 50% of the selling price.

Find out more information on GST Guide for Motor Traders  (423KB)