Under the Discounted Sale Price Scheme, you can charge GST on 50% of the selling price when you sell a second-hand / used vehicle. You do not need to seek prior approval from IRAS to use the scheme.
You must charge GST on 50% of the sale price and report the value of standard-rated supply and output tax in your GST return.
You sold a motor vehicle at $25,000 (excluding GST) .
GST chargeable = $25,000 x 50% x 7% = $875
For GST reporting purposes
Value of standard-rated supply: $25,000
Output tax due: $875
You sold a motor vehicle at $25,875 (including GST) .
GST chargeable = $25,875 x 7/207 = $875
Value of standard-rated supply: $25,000 (i.e. $25,875 - $875)
You may use the Discounted Sale Price Scheme in the following situations:
Another method to charge GST on second-hand motor vehicles is the Gross Margin Scheme.
Gross Margin Scheme applies to second-hand motor vehicles that were purchased free of GST (e.g. purchased from non-GST registered person or GST-registered supplier who had used the Gross Margin Scheme).
For more information, please refer to Gross Margin Scheme .
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Yes, you are required to charge GST on the sale of your company vehicle even though you did not claim GST on the purchase of the vehicle.
You should use the Discounted Sale Price Scheme and GST is charged on 50% of the selling price of the used vehicle.