SLUMP SALE VAT APPLICABILITY

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THERE'S A COMPANY HAVING TWO DIVISIONS LOCATED AT SAME PLACE WHILE FILING VAT RETURNS TWO DIFFERENT RETURNS WERE FILED. ONE DIVSION IS SOLD AS SLUMP SALE.  IS THERE ANY VAT LIABILTY ON ASSETS SOLD??
Replies (13)
which State?
Were Two Different Divisions do have saperate Registration Number?
this ais about maharashtra. earlier two divsions had different rc nos in 05-06. But now it has been consolidated into 1 no.
When Actually this Transation has taken place
on 1-11-06
I am also having similar issue. One company is purchasing by way of a slump sale one industrial unit in Karnataka. will the movable property that is plant and machinery, electrical fittings, water fittings, etc. though not quantified, be laible to VAT. My understanding, there is no VAT on slump sale.

I want to know  in case of slump sale VAT is attracted in the state of Orissa or not. Two companies are separately registered under state VAT Act.

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Originally posted by :Guest
" I want to know  in case of slump sale VAT is attracted in the state of Orissa or not. Two companies are separately registered under state VAT Act. "


 

Slump sale do not attract VAT. Please read on..

"Another important consideration is that of indirect taxes. A view has been taken that there is no sales tax payable on the transfer of a business as a going concern, including the transfer of a whole unit or division of any business under the value-added tax laws or the local sales tax laws. This is based on the rationale that the sale of an entire business cannot be equated with the sale of movable goods, the latter being subject to sales tax. The prevalent view in relation to sales tax in the case of a slump sale is that such sale would not attract sales tax since a business is not considered to be “goods” under sales tax laws. For exemption under APVAT, please see that you comply with Rule 36 for AP Value Added Tax Rules – 2005. "

NO TAX WOULD BE PAYABLE ON SUCH TRANSACTION AS THE INTENTION OF THE CONTRACTING PARTY IS TO PURCHASE THE ENTIRE BUSINESS AS A GOING CONCERN AND NOT TO SALE OR PURCHASE OF THE MOVABLE PROPERTY. A SIMILAR DECISION WAS TAKEN IN CASE OF SEALANT AND GASKET INDUSTIRES VS STATE OF MAHARASHTRA THAT SUCH TRANSACTION WOULD NOT BE REGARDED AS SALE HENCE NO TAX WILL BE PAYABLE .

Sir, the similar transaction took place in our case in the state of Madhya Pradesh.

Where the entire business unit being transfered by a registered company to another (Newly formed subsidiary of transferor co.) registered for this purpose. the department is of veiw that the tax should be deposited on the valua of machineries transfered to new co. in the cource of Slump sale.

Sir, (1) does this transactiion atracts the VAT

(2) what does includes the "Machinery"

(3) The rate of VAT if applicable,

(4) the Value of Machinery on which the VAT is applicable e.i. WDV of transferor comany or revalued value of transferee comapny.

kindly advice me

Sir, the similar transaction took place in our case in the state of Madhya Pradesh.

Where the entire business unit being transfered by a registered company to another (Newly formed subsidiary of transferor co.) registered for this purpose. the department is of veiw that the tax should be deposited on the valua of machineries transfered to new co. in the cource of Slump sale.

Sir, (1) does this transactiion atracts the VAT

(2) what does includes the "Machinery"

(3) The rate of VAT if applicable,

(4) the Value of Machinery on which the VAT is applicable e.i. WDV of transferor comany or revalued value of transferee comapny.

kindly advice me

Dera Member,

 

My query is in case of slump sale do we have to go for fresh registrtration for new co. which is subsidiry of the transferor co.For

1.VAT-CST

2. Factory Licence

3. ssi registration.

If any one has done slump sale kindly give your contact no. so that i can gain some information from your experience

 

Thanks for consideration


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