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VAT on Sale of Car

Ashish Shah (Senior General Manager) (58 Points)

23 February 2010

I wish to know if VAT is applicable on Sale of Motor Car by a Company.

The Company has purchased the Car in 2004-05 i.e. before VAT act & now selling the Car as a second hand car

The Company has not claimed set off of Tax amount at the time of Purchase.(It was capitalised)

Please reply asap

Best Regards

ashish shah

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3 Replies

CA. Hari Kishan (Chartered Accountant) (2704 Points)
Replied 25 February 2010

VAT is chargeable on the amount realised from the sale of second hand car @ 4% from 1.4.2007 under the Karnataka Value added tax act, 2003. Prior to that the rate of tax was 12.5%. Second hand car is goods as per defination of goods u/s 2(15) of KVAT Act, 2003 hence attracts VAT on the same.

PRATIK P MEHTA (Final Student,articles) (125 Points)
Replied 26 February 2010

IN THe sale of motor car by company vat is not applicable because the company have sold it asset...

durga Prasad (Accountant) (38 Points)
Replied 31 May 2013

KVAT Rate on Used Car. any clarification circular tell me. we observed the one circular No:355/07-08
30-04-200812.5% U/S 4(1)(b) of KVAT Act, 2003 applicalbe please tell me some more details for above circular and any new circular tell me . finally what rate is applicale for used car sold by company /Proprietor ..