Yes! You read that right, and it’s not a hack that can work conditionally. All you need to have is a registered firm or at least a GST number that certifies that you’re a business owner.
The gist of the statement ‘Availing hefty discount on Purchase of Automobile’ states that you get liable for a GST Input credit equivalent to the tax associated with your purchase of the automobile.
In simple words, we can say that the tax amount would be reversed back to you if you purchased your business’s name.
To know more about how this works, read the guidelines given below.
- At the time of purchase, you need to specifically mention to your car dealer that you need to generate a GST invoice in the name of your business.
- Upon successfully generating the invoice, you need to pay the total amount, including tax, to your dealer.
- Your GST portal will start reflecting an input credit equivalent of the amount of tax you paid for the purchase in the upcoming month.
- In the next step, when you file the GSTR3B of the following month of the purchase, your credit ledger will get updated with the tax amount.
- This amount can be used to pay GST returns and more. But if you want to get this amount back in the form of cash or electronic payment, there’s an entirely different procedure for that.
This way, you’ll save on GST and with the balance you have in your account, you can keep taking payments from your clients inclusive of GST and then pay the government from your credit ledger. This results in you getting the amount you receive in the name of GST in your account, which is helpful in the long term.
Why Is This Option Only Available For GST Holder/Business Owners?
The government needs people to push their economy further, and the job creators/business owners are the one’s who are taking active participation in doing that.
So, they get extra benefits and do not have to pay GST if the purchase is in the business’s name. It is considered as an added advantage on their part to unburden them a little.