Flow of Transactions
A Manufacturer sells Vehicle to B – who is its sales Company
B- the sales company sells the vehicle to the dealer- C
Dealer- C sells the vehicle to end Customer
A scheme of optional warranty for a consideration is given by the Sales company B to the customer
When customer buys the vehicle from dealer he has option to exercise warranty and he pays the optional warranty amount in favour of B- Sales Company. Dealer-C acts as an agent of B- sales Company.
Issue: Whether the optional warranty amount is to be included in sales price for purpose of charge of VAT and by whom
whether B-Sales company to charge VAT on this optional warranty on the customerwhich is exercised by the customer on purchase of vehicle from the dealer.
CAclubindia
