Chandigarh: Pay VAT on bargain, tax dept tells car groups

The auto sellers inside the city will now pay added tax (VAT) on the cut-price supplied to clients. The UT excise and taxation department has handed an order declaring that no discounts will be allowed without paying corresponding VAT on the sale of automobiles. Round 50 vehicle agencies dealing in cars and -wheelers function from Section I and Segment II of the Industrial Area. All the sellers provide heavy reductions, mainly on high-give-up cars from Rs five lakh to ten lakh. At the same time, as in other segments, discounts between Rs 20,000 and Rs 1 lakh are provided depending upon the version of the vehicle. At gift, VAT is charged at the very last value of the automobile.


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The branch has acted because the purchases are internationally crafted from the determined agencies. Any bargain affects the price of neighborhood taxes, inflicting a loss of sales to the exchequer, and such can not be permitted. The order issued through Assistant Excise and Taxation Commissioner (AETC) Ravinder Kaushik reads: “This has come to the branch’s word that during many cases, the motors are being bought to the customers after imparting reductions and freebies at the real purchase price for boosting the income. This results in a lack of sales to the exchequer as no VAT is paid on all such discounts. This should be dealt with as most urgent, and any deviation could entice motion as per the regulation.”

Tax specialists termed the flow of the branch illegal. Keshav Garg, a chartered accountant, stated that in the case of car groups, VAT can be charged most effectively on the last fee. Terming the plea taken through the department wrong, Ajay Jagga, a tax attorney, stated, “It appears the department acted in haste, and the choice became taken with our required deliberation.” Slamming the branch, BS Saluja, president of Chandigarh Car Dealers Affiliation, stated that the order opposed the laid down norms of VAT. “The department desires us now not to present cut price to clients,” said Saluja, adding that the Association could mission the selection.