The margin scheme allows a GST registered person to calculate and charge GST on the margin between the purchase and selling price of goods, rather than on the full selling value. To use the margin scheme, the person must be GST registered, the goods must be substantially the same as when purchased, and have been previously purchased from a non-GST dealer or using the margin scheme. No tax invoice is issued under this scheme and the person must meet record keeping requirements. The margin scheme can also be used for goods purchased before implementing GST that are sold afterwards.

1. Margin Scheme
GST is normally due on the full value of goods sold. However, the margin scheme allows a
GST Margin Scheme registered person who meets all the conditions to calculate and charge
GST on the margin. The conditions are set out as follows:
 He must be a GST registered person.
 The goods must be previously purchased from an individual or a non-GST dealer (no GST
was incurred on the purchase); or the goods were previously bought from a GST MS
registered person who uses theMargin Scheme; or input tax blocked goods purchased from
GST registered person.
 The goods purchased and sold under the margin scheme must be substantially the same
goods. However, repair, alterations, refurbishment and renovations which do not affect the
nature and the essential character of the goods are allowed.
 GST must be accounted on the margin between the selling price and the purchase price.
 No tax invoice to be issued by the approved person (supplier) under this scheme and hence
no input tax to be claimed by the purchaser. He must meet the record keeping
requirements of the scheme.
Margin scheme is also applicable for goods which are purchased before AD and to be
transacted in the GST era. If no margin is made (because the purchase price exceeds the
selling price) then no GST is charged and payable.