GST on a used vehicle

[4X4]

I'm buying a truck from someone, and he's charging GST. The truck is a work vehicle, and it's owned by his company. Should there be GST on this? I thought that GST is only charged on services and on new goods. There's no GST on used houses. I've never charged or been charged GST on any used vehicle.

[Resolute 14]

Ask him for his GST registration number. That'll probably throw him.

[4X4]

Originally Posted by Resolute 14

Ask him for his GST registration number. That'll probably throw him.

I don't not trust him; I think he's charging it out of habit, not to shake me down for an extra few hundred... I don't even want to bring it up with him unless I know for sure. It just occurred to me as I sat down to write a cheque. I have to meet him later on today to pay up, and of course now is when I thought about it. Not in the last two weeks when I had all the time in the world.

[The Yen Man]

Actually, funny thing. My company was disposing of some used vehicles, and I came accross this same problem. Apparently, because it's a company disposing of their vehicles, GST has to be charged on the sale of it. I don't really know how that makes sense, since GST would have already been collected and paid to the government when the vehicle was first bought when it was new.

The government is essentially double collecting on the GST. But the government justifies it by saying your business sold the car like a business transaction, thus you have to collect GST on it. I can see this making sense if the company was a used car dealership, but I don't think it makes sense if it was just a company vehicle that the company is trying to get rid of.

[DownhillGoat]

nm

[You Need a Thneed]

If the vehicle is being sold by a company who is GST registered, they must charge GST on a used vehicle, yes.

[Sample00]

if the vehicles are owned by a company, the company must charge GST on the vehicle.
if its registered in a person's name, no GST is charged.
Used car dealerships such as ours have to charge GST on used vehicles.

[Locke]

If its his company's vehicle then hes probably deducted the GST on the original purchase from his remittances and has to include the remaining GST for his future remittance.

[transplant99]

Originally Posted by Sample00

if the vehicles are owned by a company, the company must charge GST on the vehicle.
if its registered in a person's name, no GST is charged.
Used car dealerships such as ours have to charge GST on used vehicles.

still one of the most mind-boggling parts of the whole stupid tax.

[The Yen Man]

Originally Posted by Locke

If its his company's vehicle then hes probably deducted the GST on the original purchase from his remittances and has to include the remaining GST for his future remittance.

K, that makes total sense. I don't know why that didn't even occur to me.

[4X4]

Well...Damn.

Thanks for the answers

[RandyHolt]

If it's worthwhile you might want to call the GST ruling centre (1-800-959-8287) and see if there is a way to get the GST you pay back since you aren't registered for GST.

[You Need a Thneed]

Originally Posted by transplant99

still one of the most mind-boggling parts of the whole stupid tax.

Corporations pay tax on the initial vehicle, but can deduct it on thier net GST return. At that point, the government is net $0 in collecting GST on the vehicle. When the corporation sells the vehicle, they must charge GST on it, so that there is GST payable to the governemnt for the vehicle. If another corporation buys it, they will get that GST paid back on their GST return.

[You Need a Thneed]

Originally Posted by 4X4

Well...Damn.

Thanks for the answers

Do you have a company in your name? Buy it under your company, get the GST back.

[4X4]

Originally Posted by RandyHolt

If it's worthwhile you might want to call the GST ruling centre (1-800-959-8287) and see if there is a way to get the GST you pay back since you aren't registered for GST.

Well, I am registered, and I will sell this truck to my company. So I guess I'll get it back eventually. I'm just cheap and wanted to save money today..!!

[Mccree]

IF the guy is a "car dealer" than I believe GST applies on the sale.

[Hockeyguy15]

Originally Posted by transplant99

still one of the most mind-boggling parts of the whole stupid tax.

Ummm I think you mean mind-bottling....

[burn_this_city]

Originally Posted by Hockeyguy15

Ummm I think you mean mind-bottling....

I don't believe his thoughts are trapped in a bottle.

[Bill Bumface]

If you trade in or sell a used vehicle to a dealership they have to credit you for the GST of the sale price.

[HOOT]

Originally Posted by You Need a Thneed

If the vehicle is being sold by a company who is GST registered, they must charge GST on a used vehicle, yes.

Same rules here in BC with ICBC.