Margin Scheme

SALE OF VEHICLE UNDER MARGIN SCHEME

MARGIN SCHEME
Margin scheme is for persons who deals in purchase and sale of second hand
goods. Under this scheme, GST is payable only on the margin difference between
the purchase and sale price of the second hand goods. When the second hand goods dealer
purchases such goods from an unregistered person then no GST is levied.
Example
You are in the business of selling second-hand cars. You bought a car from a non-GST registered
person at $900 and LTA Charges $100.sold the car to your customer for $1,500.
Based on the Gross Margin Scheme:
GST = ($1,500 – $1,000) x 7/107 = $32.71
For GST reporting purposes
Value of standard-rated supply: $1,467.29 (i.e. $1,500 – $32.71)
Output tax due: $32.71

HOW TO CREATE EXPENSES LEDGER UNDER MARGIN SCHEME:
Step1>Go to setting under setting tab.
Step2>Click account ledger under accounting tab.
Step3> Click add account.

Step4>Select trading expense in group.
Step5>Give ledger name (LTA Charges).
Step6>Select non taxable in taxable ledger.
Step7>Enable is under margin scheme option here.
Step8>Click create.

HOW TO CREATE PURCHASE BILL.

Step 1>Go to“Purchase Bill” under“purchase tab.
Step 2> “Add Purchase invoice” Bill Button.

Step3>Select vendor name & Car plate no.
Step4>Give vendor bill no & select date.
Step5>Select product/Car & and fill price.
Step6>Click save.

HOW TO ENTER ADDITIONAL EXPENSES FOR PURCHASED CAR:

Step1>Go to payment under expense tab.
Step2>Click add payment.

Step3>Select direct payment in payment type.
Step4>Select payment method & payment mode.
Step5>Select date.

SALES UNDER GROSS MARGIN SCHEME.

Step1>Go to invoice under sales tab.
Step2>Click add invoice.

Step3> Select Margin scheme invoice in setting type.
Step4> Select customer name & vehicle no.
Step5> Select executive.
Step6> Select product/vehicle.
Step7>Mention sales value in amount box as1500$.
Step8> so your profit margin (500$) will be auto populated in the Asses val box (Selling Price-
Purchase price-Other allowed expenses). And your tax will be 32.71$
Step9>Click Save.