As a authorised dealer, we are buying and selling used cars business and accounting the same under trading The service tax department says that it will attract service tax since the said vehicles are not transferring in our name before selling to the ultimate customer as per RTO rules . The State Govt. charges the VAT for the differences between purchases and sales.
Let me know whether service tax is applicable on this transaction.
Thanking you in advance.
V.Sathiyanarayanan
Used Car Dealer Exempt from Service Tax: Transactions Fall Under Negative List; VAT Applies on Price Difference An authorized dealer involved in buying and selling used cars questioned whether service tax applies to their transactions, as the vehicles are not transferred in their name before selling to customers, according to RTO rules. The state government charges VAT on the difference between purchase and sale prices. A respondent clarified that trading activities, such as buying and selling, fall under the negative list for service tax and are not liable. The transfer status of cars per RTO provisions does not affect VAT applicability or service tax exemption on sales. (AI Summary)
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