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

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The automobile dealers within the metropolis will now ough Presso Graphy to pay cost added tax (VAT) on the amount of bargain offered to customers.

The UT excise and taxation branch has passed an order stating that no reductions will be allowed with our payment of corresponding VAT at the motors’ sale.

Round 50 vehicle organizations dealing in motors and two-wheelers operate from Segment I and Segment II of the Industrial Area.

All the sellers deliver heavy discounts, mainly on high-stop vehicles ranging from Rs 5 lakh to 10 lakhs. In different segments, discounts among Rs 20,000 and Rs 1 lakh are presented, relying upon the automobile version.

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At gift, VAT is charged at the very last value of the vehicle.

The branch has acted considering that the purchases are being crafted from the figure businesses on the inter-nation foundation. Any discount affects local taxes’ fee, causing a loss of sales to the exchequer cannot be accepted.
The order issued with the aid of assistant excise and taxation commissioner (AETC) Ravinder Kaushik reads: “This has come to the department’s notice that in many cases the vehicles are being offered to the customers after offering discounts and freebies on the real purchase rate for reinforcing the sales. This ends in the exchequer’s lack of revenue as no VAT is being paid on all such reductions. This must be dealt with as maximum pressing, and any deviation might attract motion as according to the regulation.”

Tax specialists termed the flow of the department unlawful. Keshav Garg, a chartered accountant, stated that in the case of automobile corporations, VAT may be charged only on the final price.

Terming the plea taken with the aid of the department wrong, Ajay Jagga, a tax legal professional, said, “It appears the branch acted in haste and the choice turned into taken without required deliberation.”

Slamming the department, BS Saluja, president, Chandigarh Automobile dealers Affiliation, said that the order changed towards the laid down norms of VAT. “The branch needs us now not to provide bargain to customers,” said Saluja, including that the Affiliation would mission the choice.

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