VAT on hire charges - hiring of vehicle in Assam

[RAJAGOPALAN R]

Commissioner of Sales Tax Assam has directed our company to deduct VAT on hire charges paid for hiring vehicles supplied by our contractors under various agreement executed by the company. Kindly inform whether we should accept the order and deduct the VAT at 13.5% and pay the amount to State govt or go for a writ against the said order.

[Surender Gupta]

It is nature of contract and facts would help to determine the issue. Kindly approach the local consultant to get support on this issue.

AI Summary

VAT on vehicle hire: obligation to withhold VAT on contractor hire charges depends on the contractual character and factual matrix. A tax authority directed the company to deduct VAT on vehicle hire payments made to contractors; whether VAT must be withheld depends on the legal characterisation of each hiring contract and the factual matrix of the supply. A fact specific review of contracts, invoicing and tax allocation is required and local professional tax advice is recommended before complying with or challenging the direction.