Are you thinking of selling your old cars and wondering how much GST you have to pay on used cars in Delhi? The GST laws for selling old cars might be hard to understand, whether you’re doing it yourself or through a dealer. This article provides all the answers you need, from knowing the GST rate on used cars to how it works in different situations. The most recent update from the GST Council meeting on September 3, 2025, has major changes that will directly affect prices and the whole process of making a transaction.
This blog post will provide you all the information you need to make a smart choice about how the new GST rules affect the prices of used cars in the Delhi NCR.
New GST Rates for Used Cars in Delhi
The government has recently changed the 28% tax structure on four-wheelers under GST 2.0. As a result, the cost of cars in all categories went down. Starting on September 22, 2025, compact cars with 1200 cc petrol engines, 1500 cc diesel engines, and a length of less than four meters will be subject to 18% GST. Luxury cars and big SUVs were taxed at a rate of 40%.
In addition, older four-wheelers had to pay a compensation cess of 1% to 22%. This has also been cut down in this current change.
For dealers, the GST on selling used cars is based on the margin, not the whole amount. If a dealer buys a car for ₹5 lakh and sells it for ₹6 lakh, the GST only applies to the ₹1 lakh profit margin, not the whole transaction price. This makes sure that the dealer’s tax burden is in line with their actual profit.
If you’re selling your old car, you’ll be happy to know that you won’t have to pay GST. If you’re selling your car to a friend or putting it up for sale online, GST doesn’t apply to used car sales by people. You don’t have to worry about any extra taxes or paperwork.
The Direct Impact of GST on Used Cars
The council made it plain and easy for the used car market to understand, but the adjustments to the GST rates for new cars are a big part of the story. This is where buyers and sellers of secondhand cars in Delhi will see the biggest changes.
The “Margin Scheme” is still the fundamental idea, but the rules have been made easier to understand so that the process is more open. When you sell a secondhand car, you don’t have to pay GST on the whole price. It solely applies to the dealer’s profit margin, though. The most important thing that came out of the 56th GST Council meeting is that all registered dealers would have to charge an 18% GST rate on this margin for all sorts of used cars they sell.
How These Changes Affect You as a Buyer
More Transparent Pricing
As a buyer, you will get more transparency in pricing because of the simplified GST rule. If you buy from a dealer, you need to pay 18% GST on dealer’s margin. It is easy to calculate and understand. But if you buy used car from the direct owner, then no GST will apply.
Wider Price Gap from New Cars
The new GST on used cars makes it easy for you to buy any luxurious car, like an SUV. The price difference, especially for bigger and more expensive cars, is still very big. The new 40% GST on bigger new cars will keep their prices high, which makes the used versions of these cars even more appealing and a good choice for consumers.
Increase Market Size
The simplified GST rules encourage more people to participate in the used car market. More people are finding a good career scope in this business. So as a buyer, you have a number of channels to buy used cars in Delhi.
How These Changes Affect You as a Seller
These new laws are also good for anyone who wants to sell used cars in Delhi. Dealers can give you a clearer and fairer price for your car since they know exactly how much tax they will have to pay. Dealers can get inventory more easily since the transaction process is smooth and predictable. This can lead to a better experience for you when you buy something.
To learn more read our blog: Recent GST Additions You Must Know Before Buying a Second-Hand Car in 2025
Simplifying Your Experience with HaloTrades
The new GST laws has made the market for used cars more open, yet it can still be challenging to acquire or sell a used car in Delhi. HaloTrades is an advanced online platform that can help with this. The objective of HaloTrades is to make the transaction easier and give you a stress-free, safe experience.
For Sellers:
Halotrades makes it simple to sell your car. You don’t have to deal with middlemen and argue about prices. Instead, our AI-based approach gives you a fair, data-driven evaluation. Our experts will come to your location and undertake a comprehensive inspection. They will then give you a final offer that you can’t change and that you can accept right away. You don’t have to worry about the new GST laws because your sale is between two people on our site. There is no tax on the sale. We handle all the paperwork, including the transfer of the RC, to make sure everything happens easily and safely.
For Buyers:
When you buy a used car from HaloTrades in Delhi, you can be sure of its quality and value. We deliver honest and detailed information on the state of each used car, its service history, and a clear breakdown of the costs. This now includes a simple, easy-to-understand GST part for cars owned by dealers. This gives you peace of mind knowing the price you are paying is fair and right. We also handle all the paperwork and the transfer of the RC, so you can just enjoy your new car.
Wrapping up
The new GST rules are an excellent first step toward making the used car business more open and efficient. If you know how these modifications work and use a site like HaloTrades, you may purchase or sell a used car in Delhi with complete confidence. You can be guaranteed to get the greatest deal this way, with no surprises.
FAQs
Q: How much is the GST on secondhand car that dealers sell?
For registered dealers, the GST tax is a flat 18% on their profit margin.
Q: Do I have to pay GST if I sell my car privately?
No, people who sell their own old cars don’t have to pay GST.
Q: How does the Margin Scheme work when buying a secondhand car?
Dealers only have to pay GST on their profit, not the whole price of the car, thanks to the Margin Scheme.
Q: How do new car GST rates affect used car prices?
The high GST on new luxury cars keeps their prices high, which makes used versions more appealing and makes the price difference even bigger.