Vat registration applicability - sale of assets

[Rahul Bagaria]

My company is an unregistered dealer in the state of Haryana.The company is into Life Insurance Business hence only taken registration under Service Tax.We had purchased fixed assets by paying full rate of tax as unregistered dealer. Now we want to sell our fixed assets to a leasing company and take it back on lease by paying a monthly lease rental.Please suggest do we need to take a sales tax registration for selling the assets to the leasing company and charge VAT from them. Else can't the leasing company deposit the tax on our behalf as we do not want to go to the hassels of registration.Or is there no liability of tax on us.Please suggest with the best option

AI Summary

Life Insurance Firm Can't Shift VAT Liability to Buyer When Selling Fixed Assets, Must Register for VAT. A company in Haryana, engaged in the life insurance business and registered only under Service Tax, inquired about the necessity of obtaining VAT registration for selling fixed assets to a leasing company. The company prefers not to register for sales tax and is considering whether the leasing company can handle the tax obligations. The response clarified that the seller typically must discharge VAT liability, and transferring this responsibility to the buyer is not permissible unless explicitly allowed by VAT laws. The system does not support shifting the tax burden to the buyer, similar to the reverse charge method in service tax.