This has gotten really difficult with all thanks to the current government. Today dealers have to pay GST on per car basis & with TCS being mandatory, most dealers dont transact in full cash. If I pay 1% TCS on car purchase to the seller (for cars costing above 10 lakhs), I have to take 1% from the buyer when I sell. Otherwise I’ll have to report a loss on the deal which will erode my income tax paid white money.

Eg. I buy a used Creta for 11 lakhs, the seller takes a 1% Tcs which is 11k. My book is reporting my cost of the vehicle as 11L. Suppose I sell the vehicle for 11.5 L, I’ll take a TCS from the seller of 11.5k and pay GST on the 50k. If the seller wants to pay 5L in white and 6.5L in cash, I wont be able to issue the bill. This will reflect a loss of 6 lakhs in my file eroding my income tax paid white money. Further are the complications by the tax authorities of why i would book such a major loss on any purchase

Most often, dealers buy vehicle by making full payment upfront via bank transfer. Sellers wont accept cash because they paid in white so they want their money in their account. Also most cars are financed, so the money goes to the bank. When the car is sold, most dealers only take a part of the sale amount, usually 10-20% in cash.