Vat/cst on sale of company's old car

This query is : Resolved

Pankaj Arya (Querist)
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27 July 2012 Dear Experts
Our company wishes to sell its old car to one of its employees.
Co. is registered in Delhi for VAT & CST and has offices in Delhi & Gurgaon.

The employee resides in Gurgaon. What should the Company charge on sale of its old car....VAT or CST.

PLease also guide me about the implication of VAT paid at the time of purhase of this car by the Company (input VAT). We are charging depreciation on the full cost of the car incl. input VAT.

Please guide.

Suresh Mittal

Suresh Mittal (Expert)
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27 July 2012 The company will have to pay VAT/CST on sale consideration @12.5%. The input tax paid at the time of purchase of car is not available for adjustment against liability because car is not used for manufacturing of taxable item, or was not purchased for resale as is.