VAT on purchase

This query is : Resolved

Saket (Querist)
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07 January 2008 A firend of mine works in company. He had a company owned car for which a certain amount was being deducted from his salary every month. When he decided to leave the company he was asked to purchase the car from the company at the wdv with 12.5% vat being charged on the same ( i.e wdv + vat).
My query is wether such a transcation involves vat . If so which section can I refer to.

annapurna

annapurna (Expert)
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08 January 2008 It is the common practice in the companies that the car will be provided to the employees but it will be registered in the name of company. In case where the car is sold to employee then VAT is required to be charged because there is sale of car.

CA. O.P. Agarwalla

CA. O.P. Agarwalla (Expert)
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09 January 2008 Can some one explain that why dealers are made liable to pay VAT on sale of Used Cars, whereas no ITC (Inpout credit) is avialable to them against such purchases. Is it not against the evry spirit of VAT? Shouls State Govt be allowed to collect and recollect VAT on each and every sale or resale?

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