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The Discounted Sale Price Scheme lets you charge GST on 50% of the selling price of a second-hand or used vehicle. You do not need IRAS’ approval to use this scheme.

Who can use this scheme

You can use this scheme if you are not a motor vehicle dealer and occasionally sell a vehicle that has been used in your business.

You can also use this scheme if you are a second-hand motor vehicle dealer and either of the following applies:

  • You do not meet the requirements for the Gross Margin Scheme for your sale of a second-hand vehicle. For example, you bought the vehicle from a GST-registered supplier who did not use the Gross Margin Scheme.
  • Your customer is GST-registered. Selling under this scheme allows your customer to claim the GST incurred, provided that the vehicle is a commercial vehicle and the conditions for claiming input tax are met.

Note: You must charge GST on the sale of your company vehicle even if you did not claim GST on the purchase of the vehicle as it was disallowed.

How to calculate and report the GST

Use the relevant formula below depending on whether your sale price includes or excludes GST

You sold a motor vehicle at $25,000 (excluding GST) on 5 Jan 2024.

GST chargeable = 9% x 50% x $25,000 = $1,125

For your tax invoice, state:

  • Selling price: $25,000
  • GST @ 9% × 50% × $25,000: $1,125

For your GST return:

  • Value of standard-rated supply: $25,000
  • Output tax due: $1,125

You sold a motor vehicle at $52,250 (including GST) on 5 Jan 2024.

GST chargeable = $52,250 x 9/209 = $2,250

For your tax invoice, state:

  • Selling price: $50,000
  • GST @ 9% × 50% × $50,000: $2,250

For your GST return:

  • Value of standard-rated supply: $50,000 (i.e. $52,250 - $2,250)
  • Output tax due: $2,250

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