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Whether the vat is applied or not?

11 February 2012

Dear Friends,

One the our client is in trasportation business.For the purpsoe of the parking he has cut down his trees and make the space available for the purpose of parking.He then sold out the those unwanted trees/woods as scrap.

Whether he is required to get himself registered under Gujrat VAT Act?

Whether he is required to levy the VAT and collct the same under Gujarat VAT Act?

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3 Replies

Harshal Fifadra (Chartered Accountant) (1489 Points)
Replied 12 February 2012

In any state , for VAT to apply ther sholud be a business and the business should be of selling goods . In the instant case the trees that are sold does not form a part of his business . The client of yours neen not get registered under Gujarat VAT act . The income from sale of scrap trees will form part of the client's Income from other sources .

jaimin shah (Finance Manager) (111 Points)
Replied 07 March 2012

no need to get registered as there is limit of turnover which should be achieved than only need to get registered.

Anoop (Service) (345 Points)
Replied 10 March 2012

I am agreed with Mr. Shah. As per rule, a dealer needs to get registration on the basis of exceed the limit of turover not on the basis of products. If a registered dealer sells wood (scrap) then he'll have to charge tax & pay to govt. even he is not engaged for purchasing & selling of woods.