Chandigarh: Pay VAT on cut price, tax dept tells vehicle corporations

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The auto dealers in the city will Graet News Network now must pay fee introduced tax (VAT) on the quantity of bargain presented to customers.

The UT excise and taxation department has handed an order stating that no reductions will be allowed without charge of corresponding VAT on the sale of motors.

Round 50 automobile corporations dealing in cars and two-wheelers function from Section I and Phase II of the commercial Area My True Care.

All the dealers provide heavy discounts, specifically on high-quit vehicles starting from Rs 5 lakh to 10 lakh, even as in other segments discounts between Rs 20,000 and Rs 1 lakh are supplied relying upon version of the car.

At gift, VAT is charged on the final price of the car.

The department has acted considering the fact that the purchases are being made from the discern organizations on inter-nation basis and any bargain impacts the charge of neighborhood taxes, causing a lack of revenue to the exchequer and such can’t be authorized.
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The order issued by way of assistant excise and taxation commissioner (AETC) Ravinder Kaushik reads: “This has come to the branch’s word that in many cases the vehicles are being offered to the clients after presenting reductions and freebies at the real purchase fee for enhancing the sales. This leads to the loss of revenue to the exchequer as no VAT is being paid on all such discounts. This need to be treated as most pressing and any deviation could attract action as per the regulation.”

Tax experts termed the flow of the branch unlawful. Keshav Garg, a chartered accountant, said that during case of vehicle agencies, VAT can be charged best on final value.

Terming the plea taken via the branch wrong, Ajay Jagga, a tax attorney, stated, “It appears the department acted in a haste and the choice was taken without required deliberation.”

Slamming the department, B S Saluja, president, Chandigarh Automobile dealers Affiliation, stated that the order became against the laid down norms of VAT. “The department desires us not to offer discount to customers,” said Saluja, including that the Association might mission the selection.