Bill My CarInvoicing and Billing
Car Dealer Invoicing in India: GST, Non-GST, and Getting It Right
Used-car dealer invoicing is more complex than general retail. Dealers must navigate the GST margin scheme, maintain separate purchase records, and issue vehicle-specific documents that go beyond what generic billing apps can produce.
Two invoice types
GST tax invoice - For registered dealers. GST is calculated only on the margin (sale price minus purchase price) under Rule 32(5) of the CGST Rules, 2017. HSN code: 8703. Rate: 18% on margin (9% CGST + 9% SGST intrastate).
Non-GST bill of sale - For unregistered dealers and private sellers. No GST. All vehicle details still required.
Margin scheme calculation
Taxable value = Sale price - Purchase price (the margin). GST = Margin x 18/118 (margin is GST-inclusive).
Example: Sale Rs 4,50,000, Purchase Rs 3,80,000, Margin Rs 70,000, GST = Rs 70,000 x 18/118 = Rs 10,678.
HSN codes
- Passenger cars (8703): 18% GST on margin
- Motorcycles (8711)
- Commercial vehicles (8704)
Invoice numbering
- Consecutive and unique within a financial year
- Max 16 characters
- Fresh series each 1 April
- Separate series for GST and non-GST is allowed
Common mistakes
- Applying GST to full sale price instead of margin
- Wrong chassis/engine number (causes RTO rejection)
- Issuing GST invoice without being registered
- Reusing invoice numbers
- Not maintaining purchase records for audit
Related
Stop retyping the same details on every form
Bill My Car turns one invoice into GST & non-GST bills, sale letters, Form 29, Form 30 and delivery notes, auto-filled and ready to download. Built for Indian used-car dealers.
Try Bill My Car free →Frequently asked questions
What is the HSN code for used cars?
The HSN code for motor vehicles including used passenger cars is 8703. This code appears on every GST invoice issued by a registered used-car dealer. The GST rate on the margin under Rule 32(5) of the CGST Rules is 18 percent, split as 9 percent CGST and 9 percent SGST for intrastate sales.
Can a used-car dealer charge GST on the full sale price?
No. A registered used-car dealer must use the margin scheme under Rule 32(5) of the CGST Rules, 2017. GST is calculated only on the positive margin between the sale price and the original purchase price. If the margin is zero or negative, no GST is due.
What is the invoice series requirement for used-car dealers?
Each financial year requires a fresh invoice series that is unique, consecutive, and not re-used. A dealer can maintain separate series for GST and non-GST invoices. The invoice must be issued at the time of sale or delivery, whichever is earlier.
Do I need to mention the purchase price on a GST invoice?
The margin scheme invoice does not require the purchase price on the face of the invoice. However, you must maintain purchase records so the margin can be verified during a GST audit. Bill My Car stores the purchase price for calculation but prints only the required fields on the invoice PDF.