Vat applicablity
girish
(Querist) 22 November 2013
This query is : Resolved
one of my client want to sell a part of its division with all assets and liabilities, which includes inventories, my point is whether VAT is leviable on transfer of such inventory under Gujarat Comemrcial VAT Act
Regards
Girish Mani
BAALASUBRAMANNYAMM
(Expert) 23 November 2013
pls. read the act:
GUJARAT VALUE ADDED TAX ACT, 2003
I. Introduction
Gujarat Value Added Tax, 2003 (GVAT Act) is made effective in the State of Gujarat from 1st April, 2006. On its implementation, following Acts have been repealed.
• The Gujarat Sales Tax Act, 1969, (GST Act)
• The Bombay Sales of Motor Spirit Taxation Act, 1958.
• The Purchase Tax on Sugarcane Act, 1989.
However, provisions relating to pending assessment, appeals, recovery, etc., under the above Acts will survive.
The basic requirement of charging tax under GVAT Act is that where any sale/ purchase of taxable goods in the course of business is affected, in the State of Gujarat, VAT is payable under GVAT Act. Transactions made in the course of business only are covered under the GVAT Act.
II. Important Definitions
A few important definitions are given hereinbelow.
1) Business — Sec. 2(4)
The term "Business" as defined in Section 2(4) means any commercial activity in the nature of purchase, sale or supply, with or without intention to make profit and whether or not profit accrues there from. Further, any transaction of buying, selling or supplying plant, machinery, consumable stores, waste products, or such other goods or waste or scrap of any of them which is ancillary or incidental to or resulting from such commercial activity are also covered.
(It is not specifically mentioned in the ACT with regard to applicability of VAT on inventory, but covered the same u/s 2(4) of the ACt.
R K JAIN
(Expert) 26 November 2013
Sale of whole business is not taxable under VAT Laws.
