VAT on hire of Movable Asset

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Vijay Budhwani (Querist)
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22 November 2007 Dear Members,
Kindly ignore the previous one.
One of our clients wants to purchase machinery and transfer the same to other party on lease. Kindly advice on the VAT implications i.e. VAT will be charged at what rate and schedule entry if any.

Kindly do the needful

CA. O.P. Agarwalla

CA. O.P. Agarwalla (Expert)
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22 November 2007 Transfer of right to use of movable property is subject to VAT. If your machinery is movable property, the lease rent will attract VAT. The rate of VAT will depend upon the schedules of ur State VAT Act (In Assam it is 12.50%). As regards ITC against the purchases, pl. refer relevant section of your state VAT Act.

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