30 November 2014
Dear sir's one of my client registered under COT at Bangalore they have bought one new car and sold old car now the enforcement people asking to pay tax 5.5% because they are under cot. My question is we are already paid tax while purchasing the car and we have not taken input tax credit due to COT registration and all the notification i have checked at online that is all given used cars are taxable while resale (That is applicable for the dealer who is dealing used car sales ) but our client is doing hotel business and there is no particular notification for the same issue for the other dealers kindly help me how to save the tax and give me the notification or case law for the same. by Ravi
01 December 2014
The VAT authorities are correct.The COT scheme opted by your client is for hotel business only. If any other sale or interstate sale is done by a dealer,then normal rate of tax is applicable.As per that notification,offering a reduced rate, input tax credit can not be availed.....mjk
CAclubindia
