Vat on used cars in karnataka

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Querist : Anonymous

Querist : Anonymous (Querist)

05 July 2016 Hello
In the context of a used car dealer in Karnataka, does one charge VAT on difference amount between buyer and seller values, or is it VAT on the seller value.
Also will it differ in the follg cases
1. c to c via dealer a/c
2. b to c via dealer a/c
3. b to b via dealer a/c
4. c to b via dealer a/c

If cash transaction then anyway we presume on ST on the difference amount which will become the internal invoice value, plus TCS now.

Thnks

Amol S Joglekar

Amol S Joglekar (Expert)
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05 July 2016 http://ctax.kar.nic.in/press/CR56.Clarification0001.pdf

please go through the same.

Querist : Anonymous

Querist : Anonymous (Querist)

05 July 2016 Thanks for the response, but query is for private passenger cars, so doc is not directly implying the same.
Also need understanding on VAT being calculated on sale amount or difference (as this is a dealer and only trades between 2 parties, except that the moneys is getting transacted thru dealer a/c)

Amol S Joglekar

Amol S Joglekar (Expert)
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05 July 2016 in that case, if the person is acting as AGENT, then VAT is not applicable.

Querist : Anonymous

Querist : Anonymous (Querist)

05 July 2016 Sir, another input was given saying that even though we are dealer (agent), but since we are buying car from customer, displaying in our showroom, and selling to customer, we should charge VAT on sale value, with no input credit (since buying from customer and not broker or company).
No VAT and only ST is available only for agent which will hold the car, but seller will pay money to buyer directly, and only commission portion given to dealer. But this is not our biz model.
Would you be able to suggest any option to handle this, as VAT on full sale amount will dent the margin.

Querist : Anonymous

Querist : Anonymous (Querist)

Amol S Joglekar

Amol S Joglekar (Expert)
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06 July 2016 01. Agent can always take the stand : "Purchasing/buying in the case of vehicles is complete once the vehicle is transferred in the name of the purchaser. Agent is NOT transferring the vehicle in his/her name. So? " (This will probably disclose your GROSS profit to the person from whom you got the vehicle for onward sale) OR
02. You can negotiate with the person from whom you are getting the vehicle for onward sale; about the VAT.... if s/he has VAT, then price will be so and so...else 5% less

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