GST on RTO charges, Insurance paid to bike seller

Question Bank › Category: Goods & Service Tax (GST) › GST on RTO charges, Insurance paid to bike seller
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Anil asked 1 month ago

We have purchased bikes for our office and received invoice from motor selling company to pay Rs. 73000/- as per detail below.
Bike price for Rs. 60000
helmet & accessories  for Rs. 1000
RTO charges for Rs. 7000
Insurance for Rs. 5000  
GST is extra.
Now they are claiming extra GST on total 73000/- but we think in case of insurance GST is already charged by insurance company in policy document but seller is charging GST again on reimbursement. What is the proper way.

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Manoj Sharma answered 1 month ago

As we know that in case of purchase of motor vehicle, seller claim different charges like-

  1. Ex-showroom price of bike/car
  2. Assessories
  3. RTO charges for getting the vehicle registered with RTO
  4. Insurance (provided by insurance company, but you may pay directly to insurance company and getting it done through seller)

In this case, GST is applicable (presently 28%) on motorcyles and accessories. but
GST in insurance is charged only by insurance company hence you need to pay/reimburse this amount to the seller of motorcycle in capacity of pure agent and no further GST is to be loaded by seller on this amount. 
RTO charges are not subject to GST and you need to pay/reimburse this amount to the seller of motorcycle in capacity of pure agent and no further GST is to be loaded by seller on this amount. 
Hence in your case you need to pay
60000+ GST for motocycle
1000+GST for assessories 
7000 (without any GST) 
5000 (inclusive of GST as GST already charged by insurance company)
You need to take up with the seller and get the bill corrected before payment. 
 

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