Sale on Car

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 January 2010 I had purchase a car in 2004, now in 2009 i have to sell it. Is there any vat applicable on it? if yes then how?

Pawan Periwal

Pawan Periwal (Expert)
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02 January 2010 whether this car is for persoanl purpose or you are trading in car buy/sell.

If personal, No VAT otherwise a BIG Yes...

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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02 January 2010 No VAT applicable in your case.

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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02 January 2010 VAT is applicable on the person registered under VAT.

Querist : Anonymous

Querist : Anonymous (Querist)

07 January 2010 but i am registered in dvat so what will i do now?

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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07 January 2010 Is is personal car or shown in business accounts.

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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07 January 2010 Have you claimed input credit at the time of purchase?

Querist : Anonymous

Querist : Anonymous (Querist)

11 January 2010 No

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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23 July 2025 Here's a summary based on your scenario of selling a car purchased in 2004 and sold in 2009, and VAT implications:

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### 1. **Is VAT applicable on sale of your car?**

* **If the car is for personal use (not used in business)**, then **no VAT is applicable** on the sale.
* Sale of a personal vehicle is considered a **transfer of personal asset**, which is outside the scope of VAT.

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### 2. **If you are registered under VAT (like DVAT) and the car is used in business**

* If the car is **used for business and shown in your books/accounts as a business asset**, VAT implications can arise.
* But **since you did not claim input VAT credit on purchase**, VAT on sale **is generally not applicable**.
* If input credit was claimed, VAT may be payable on sale value as per local VAT rules.

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### 3. **Summary**

| Scenario | VAT Applicability |
| ---------------------------------- | ---------------------- |
| Personal car sale | No VAT |
| Business car, input credit claimed | VAT applicable on sale |
| Business car, no input credit | Generally no VAT |

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If you want, I can help you draft a simple note or VAT invoice for the sale or advise on other tax implications like income tax on capital gains from sale of car. Would you like that?

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