Vat in punjab on used car

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parvinder singh (Querist)
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12 October 2011
Recently there is amendment in relation to used car where by every dealer has to pay tax on used car for ist first sale at the rate of Rs 3000 or 5000 depending upon Cc of the car.

MY question is

Is this amendement applicable to Ltd companies if they sold their car.(not in the business of buying or selling the car)

On enquiry from VAT Cell at patiala they told us Every persons who sell the car are liable to pay the tax.

But so far as notification is concerned every dealer is liable to pay the tax and dealer is not defined under the Punjab Act however defined under the CST Act and person who is in the business of buying and selling the goods or his agent is primarly can considered a dealer.

moreover ITC is also not available when a company buy a car.Then how can company liable to pay the tax if he is not in a business to buy or sell the car.

The relevant notification and defination under CST Act is given.

Please share your opinion in the matter.

In the said schedule ‘E’, after serial No.9, and the entries relating thereto the following shall be added, namely:-

‘’10 (a) Pre-owned cars having engine Rs.3000/- per car on the first
Capacity not exceeding 1000cc. sale, by a dealer
liable to pay
tax under this Act.

(b) Pre-owned cars having engine Rs.5000/- per car on the first
Capacity exceeding 1000cc. sale, by a dealer
liable to pay tax
under this Act.”

KARAN BIR SINGH SIDHU
Financial Commissioner, Taxation and
Secretary to Government of Punjab,
Department of Excise and Taxation.

Dealer under CST Act

[(b) "dealer" means any person who carries on (whether regularly or otherwise) the business of buying, selling, supplying or distributing goods, directly or indirectly, for cash or for deferred payment, or for commission, remuneration or other valuable consideration, and includes-

(i) a local authority, a body corporate, a company, any co-operative society or other society, club, firm, Hindu undivided family or other association of persons which carries on such business ;

(ii) a factor, broker, commission agent, del credere agent, or any other mercantile agent, by whatever name called, and whether of the same description as hereinbefore mentioned or not, who carries on the business of buying, selling, supplying or distributing goods belonging to any principal whether disclosed or not; and

(iii) an auctioneer who carries on the business of selling or auctioning goods belonging to any principal, whether disclosed or not and whether the offer of the intending purchaser is accepted by him or by the principal or a nominee of the principal.

Explanation 1: Every person who acts as an agent, in any State, of a dealer residing outside that State and buys, sells, supplies, or distributes, goods in the State or acts on behalf of such dealer as-

(i) a mercantile agent as defined in the Sale of Goods Act, 1930 (3 of 1930), or

(ii) an agent for handling of goods or documents of title relating to goods, or

(iii) an agent for the collection or the payment of the sale price of goods or as a guarantor for such collection or payment,

and every local branch or office in a State of a firm registered outside that State or a company or other body corporate, the principal office or headquarters whereof is outside that State, shall be deemed to be a dealer for the purposes of this Act.

Explanation 2: A Government which, whether or not in the course of business, buys, sells, supplies or distributes, goods, directly or otherwise, for cash or for deferred payment or for commission, remuneration or other valuable consideration, shall, except in relation to any sale, supply or distribution of surplus, un-serviceable or old stores or materials or waste products or obsolete or discarded machinery or parts or accessories thereof, be deemed to be a dealer for the purposes of this Act;]

Regards

CA parvinder Singh

parvinder singh

parvinder singh (Querist)
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17 October 2011 Dear Co Members

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