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vat on sale of capital goods (VAT)

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This query is : Resolved

Querist : Anonymous

( Querist )
30 June 2011

i want to understand whether sale of capital goods under Rajasthan vat is liable to tax or not?
eg: I have sold motor Vehicle. the said motor vehicle had been purchase in retail invoice on 30.3.2007 and taken in our balance sheet as fixed assets and we regularly claim depreciation on the said assets. I have not taken any input tax credit at the time of purchase. Today i want to sale the said vehicle. Let me know whether we have to pay vat or not? pl clear the provisions of law

Thanks and Regards
Mukhes Khandelwal

MJ Krishnamurthy

( Expert )
20 July 2011

Mr M Khandelwal,
This aspect has been taken care in many of the States in line with the priciples of VAT laws.For example,in Karnataka,the sale of used motor vechicles are charged 5% vat only(for new vechicles 14%),subject to the condition that no input tax credit should have been claimed while purchasing it. The same rule will be there in Rajastan also.However,pl check up with auto brokers or old vehicle dealers.

Querist : Anonymous

( Querist )
25 July 2011

Thanks a lot sir. Dear sir i want to understand whether sale of capital goods under Rajasthan vat is liable to tax or not? the motor cat witch i want to sold is not a business assets. its my personal car and as per provision of incomme tax act i dabited it in to assets side of Balance sheet. i just wana to know that, is personal assets are cover in vat ceretaria. i have purchase it before vat Implementation so no question rais for Vat input. please clear me.I am not a auto delear i deals in building material business and said car is my personal car. plz clear about the provision
thanks a lt agian
Mukesh Khandelwal


( Expert )
21 August 2011

As per karnataka vat laws, if a person is under KVAT and selling any goods which is liable to tax under KVAT laws, He should collect and pay vat even if he is not dealing in those items. Like used motor car, furniture etc.I am really not sure about Rajasthan Vat but as per my personal views, the same rule/logic should apply in Rajasthan also.

MJ Krishnamurthy

( Expert )
21 August 2011

You have recorded the purchase of a car as an asset in the business books of a/c.Here you purchased the car before the vat period, and therefore,you should be liable for 5% VAT only.I am not very familiar with Rajastan VAT laws.So please check up with the old car dealers or with the deparment.



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