Second hand computer

[Ankit Bhansali]

Service provider client has purchased computer and used it for the company. they have not taken any input vat credit on it.

Now they want to give the computer to the Retiring employee, Is they liable to charge VAT on the Second hand Laptop.

[YAGAY andSUN]

VAT @ 6% would be chargeable on the transaction value of the invoice on sale of computer.

[DR.MARIAPPAN GOVINDARAJAN]

Yes, VAT is applicable.

[Ankit Bhansali]

Can you give us the relevent section.

[Ganeshan Kalyani]

Computer falls under Schedule C of Maharashtra Value Added Tax Act, accordingly the rate of tax is 6%.

[Ankit Bhansali]

Can we claim input tax credit on the purchase of computer. We have purchased the computer on MRP used it and than sale to the staff.

Also how to pay the VAT of last year , If we have taken the number in current year.

[YAGAY andSUN]

If not earlier charged and paid then you would have to pay it along with applicable interest @ 18% now.

[Ganeshan Kalyani]

In Maharashtra the input credit on the item debited to P&L is eligible for credit. However the principal of in or in relation to manufacturing of goods is significant. Whether your main activity is selling computer.

You may take a call now.

[YAGAY andSUN]

Please also check the definition of Goods as well as sale under GVAT Act.

AI Summary

VAT at 6% Applies to Computer Sale to Retiring Employee; Eligibility for Input Tax Credit Discussed A service provider client purchased a computer for company use without claiming input VAT credit and now plans to give it to a retiring employee. The discussion confirms that VAT at 6% applies to the transaction value of the computer's sale. Participants clarify that the computer falls under Schedule C of the Maharashtra Value Added Tax Act. Input tax credit eligibility and payment of past VAT with interest are discussed. The importance of the principal activity related to the manufacturing of goods is highlighted, and a review of the definitions of 'goods' and 'sale' under the GVAT Act is advised.