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Composition under m vat

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CA Surender Sharma

Manager-Taxation

30 Points Joined February 2015

Dear Professional Colleague,

We want a clarification regarding composition scheme under M Vat act for buying and selling of second hand motor vehicle.

As per the section 42(2) composition scheme and notification no. VAT-1505/CR-105/Taxation-1 serial no. 4 "Dealer in second hand Motor Vehicle" can avail the scheme of composition vat and pay tax @ 12.5% on 15% of selling price.

Does the said notification include the commercial vehicle like as truck or not ?

Attached File : 1405979 1403692 m vat notification.pdf downloaded: 103 times

Replies (1)

Harshal Fifadra

Chartered Accountant

1489 Points Joined August 2011

Dear Surendar Sharma

For understanding the term motor vehicle, reference can be made to Section 2(28) of the Motor Vehicles Act, 1988 . The extract is reproduced as below :

"motor vehicle" or "vehicle" means any mechanically propelled vehicle adapted for use upon roads whether the power of 1 Subs. & ins. by Act. propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding thirty-five cubic centimetres;

(emphasis supplied)

Referring to the above definition, it can be inferred that second hand motor vehicle includes "truck" within its meaning.