06 October 2009
Sir i dont practise much of MVAT , but i have a doubt regarding the reply that you have posted .
It will be considered as sale of asset , even if i dont deal in it ??
what i mean is suppose one of my client is having his Vat certificate as chemical dealer , and he sells his business car -Is it supposed to collect Vat even though hes a chemical dealer as per Vat certificate and not a car dealer?
06 October 2009
The logic is simple. After the introduction of vat you are claiming the vat in the asset as input vat and adjusting agianst your sale dues. Ie vat on capital assets. Therefore when you are selling you have to pay vat on the same. It will be treated as out put vat. By doing so you are getting the actual vat.
Otherwise what will happen is say 10Lakhs is the asset you claim 12.5% 125000 as input vat. You sell on the next day without charging tax on the same for 9.5 Lakhs. You are gianing 125000 for 50000 this is not reasonable.
CAclubindia
