Used cars: Another GST masterstroke

Mumbai: Ah, India – the land of endless tax avenues, where not even a second-hand car can escape the clutches of the Goods and Services Tax (GST). In what can only be described as a brilliant but painful exercise in extracting revenue from the most unsuspecting avenue, the GST Council has decided to tax old, used vehicles at a wholesome 18%.

Yes, you read that right. Used cars, the ones that are about as fresh as a leftover ‘roti’ from last year, will now contribute even more to the nation's tax coffers. And what is the brilliant rationale behind the decision? Well, if you are a car dealer, and you buy a car for ₹12 lakh and sell it for ₹9 lakh, the difference—₹3 lakh—is your "margin." On that margin, the government will now demand an 18% cut.

So, what was once a depreciating asset becomes, in the eyes of the GST Council, a shiny new opportunity to squeeze out even more tax. Because why not? Cars may not be new, but the government’s appetite for tax certainly is. Now, for the non-registered individual sellers, the new rules might not apply directly. However, registered businesses are not so lucky.

They will have to apply this new tax, which, by the way, was not a new idea, as the BJP’s Amit Malviya was kind enough to point out. Apparently, this taxing of margins, though now dressed up in 18% GST clothing, was just as fashionable under the UPA era’s “Service Tax.” So, it's just a little bit of recycled bureaucracy, keeping the wheels of taxation spinning.