{"id":310,"date":"2026-07-18T22:13:55","date_gmt":"2026-07-18T16:43:55","guid":{"rendered":"https:\/\/www.taxaj.com/learn\/gst-on-second-hand-and-used-mobile-phones-and-gadgets-the-margin-scheme-explained\/"},"modified":"2026-10-14T11:40:15","modified_gmt":"2026-10-14T06:10:15","slug":"gst-on-second-hand-and-used-mobile-phones-and-gadgets-the-margin-scheme-explained","status":"publish","type":"post","link":"https:\/\/www.taxaj.com/learn\/gst-on-second-hand-and-used-mobile-phones-and-gadgets-the-margin-scheme-explained\/","title":{"rendered":"GST on Second-Hand and Used Mobile Phones and Gadgets: The Margin Scheme Explained"},"content":{"rendered":"

Dealers who buy and sell used or second-hand goods \u2014 mobile phones, gadgets, cars, and similar items \u2014 often worry about paying GST twice on the same product. To address this, GST law provides the Margin Scheme<\/strong>, under which tax is charged only on the dealer’s profit margin, not on the full resale price. This guide explains how GST applies to second-hand mobile phones and gadgets, and how the margin scheme works.<\/p>\n

The double-taxation problem the margin scheme solves<\/h2>\n

Consider this: Mr. Rohit buys a car for Rs. 10 lakh, which already includes Rs. 2 lakh of GST. If he sells it four years later for Rs. 5 lakh, charging GST again on the entire Rs. 5 lakh would mean taxing goods on which tax was already paid. The margin scheme prevents this by taxing only the value the dealer adds.<\/p>\n

What is the margin scheme?<\/h2>\n

Under Rule 32(5) of the CGST Rules, 2017, a dealer in second-hand goods pays GST only on the margin<\/strong> \u2014 the difference between the selling price and the purchase price \u2014 provided no input tax credit was availed on the purchase. If the margin is negative (the goods are sold at a loss), that negative value is ignored, so there is no GST on loss-making sales.<\/p>\n

Conditions to use the margin scheme<\/h2>\n