Clarification on liability of VAT

[Rahul Bagaria]

My company is unregistered dealer in Haryana and we plan to sell our assets to a registered dealer without charging VAT.Subsequently we wan't to take the assets back on a monthly rental lease basis froom the company to whom we have sold the assets.I don't think we are required to take registration under VAT.I will charge NIL rate of tax and raise invoice.Also there should not be any liability on the leasing company for buying the assets from unregistered dealer.Please clarify

[Rama Krishana]

Sale and purchase of assets are liable to VAT. However there is an exemption limit in each state. If you are within the exempiton limit, there is no need to take registration as well as no need to charge VAT at Nil rate as it is not required at all. But if the value of transactions are more than the exemption limits, you have to think again and would be required to pay VAT as per the local tax policies.

AI Summary

VAT liability depends on exemption limits; transactions exceeding threshold attract VAT and may require dealer registration. Liability of VAT arises on sale and purchase of assets and on subsequent leaseback; such transactions are taxable unless they fall within state-specific exemption limits. If within exemption limits, registration and charging of VAT are not required; if transactions exceed the exemption threshold, registration and VAT obligations under local tax policy apply.