Andhra Pradesh VAT on Used Cars sold to the employee

[Asked by Guest]

Sir,

Our Company is providing cars to certain Employees. Whenever the employee got transfer or resigned, he has to surrender the Car to the Company. In such case, the employee is purchasing the car from the Company at depreciated value. Whether Andhra Pradesh VAT is to be charged on that transaction?

Pleas also quote relevant Provision with respect to the reply.

AI Summary

VAT on used company cars: sale to employees is taxable and notional input tax credit may offset output liability.
Sale of a company-owned used motor vehicle to an employee is taxable under Andhra Pradesh VAT and attracts VAT even if input tax credit was not availed initially. The VAT Rules permit a notional input tax credit for dealers charging VAT on used vehicles, calculated on the actual purchase price with documentary support, adjustable against output tax but not exceeding the output tax payable on the sale.