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Please help............

Komal Sharma (Assistant Accountant) (1887 Points)

14 December 2012

Our Company has taken computers on Rent and the dealer raised invoice for the same and he charges Dvat @ 12.5%. Is he can charges Dvat on the rented computers? If yes then under which Section? Please reply asap.

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13 Replies

DAYANANDA K N (ACCOUNTS EXCECUTIVE) (575 Points)
Replied 14 December 2012

Defination of sale includes transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration. So I think vendor is right in charging the vat.

Regards

Dayananda

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Durga Prasad (Trainee) (392 Points)
Replied 14 December 2012

I think he should not charge vat on rented computers

1 Like

dharmendra singh (asst manager finance) (53 Points)
Replied 14 December 2012

I agree with dayananda. Transfer of right to use is deemed sale & changeable to vat

1 Like

nayan (article assistant) (466 Points)
Replied 14 December 2012

look as far as i am concerned. if it is just onlr rented then no vat cannot be charged. but what happens some companies as ibm , what they do is let their computer or software to venders at rent and after certain time , they gives the option to the vendor to buy these assests at considerably low cost. you may be aware that assests as computers and laptops are just worth for 2-3 years, thus they are charged to vat as per the above reason. thats y you can find servicetax + vat in transactions of softwares in some companies

2 Like

CA Pooja Agarwal (Chartered Accountant) (3228 Points)
Replied 14 December 2012

Hire charges received on renting movable goods are subject to vat as it falls under the definition of sale

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CA Pooja Agarwal (Chartered Accountant) (3228 Points)
Replied 14 December 2012

Hire charges received on renting movable goods are subject to vat as it falls under the definition of sale

1 Like

Komal Sharma (Assistant Accountant) (1887 Points)
Replied 14 December 2012

Thanx a lot for the replies..............

Pankaj Pundir (Sr. Accountant) (22 Points)
Replied 14 December 2012

Dear sir, We are a construction company engaged in the work of laying of gas pipe line. we are looking for a commercial tax consultant (Work Contract Tax) at vijayawada (Andhra Pradesh). Please provide me the reference of any good tax consultant.

MOHD ANZAR ALI (EMPLOYEE) (78 Points)
Replied 14 December 2012

kidly quote the relevent provisions on which , dealer can charge vat on computer hire charges.

thanks in advance....

Pankaj Pundir (Sr. Accountant) (22 Points)
Replied 14 December 2012

Dear Sir,

As the notification No.32/2007(composition scheme rule 2007) has been rescind and new service tax rule vide Notification no.24/2012 & 36/2012 has been affected. kindly clarify the following

1.Whether Not.No.01/2011 (amendment to Not No.32/2007) dated 01.03.2011 is in existence or not

2. We are paying the service tax on 40% value.

(i)Can we avail the full Cenvat credit of service tax paid to our subcontractor providing service under sub clause (zzd) (zzq) (zzzh) of clause (105) of section 65 if they are paying service tax on 40% value.

(ii)Can we avail the full Cenvat credit of service tax paid to our subcontractor providing service under sub clause (zzd) (zzq) (zzzh) of clause (105) of section 65 if they are paying service tax on full value after availing the cenvat credit.