Here I am assuming that the machinery u are talking about is a used machinery.
When selling a machinery (capital good), the implication of VAT depends upon two things:
1) You must have used that machinery for making goods which are taxed when sold, and
2) You should NOT have taken input tax credit on purchase of such machinery.
If both the conditions are satisfied, only then you are EXEMPT from paying(or clooecting) VAT on the sale of machinery.