Vat liability on contribution of existing capital goods
POOJA
(Querist) 24 September 2014
This query is : Resolved
!! URGENT !!
Two Proprietary industry having separate entity in M.P. are established in one land, adjoining to each other, is now converted into partnership firm & Plant & Machineries of both the proprietary unit are introduced as capital contribution in the firm Our Questions in regards to above is:
Whether commercial tax officer can levied commercial tax on introduced capital contribution in the machineries considering it as transfer/sale if yes or no please give reason for that with supporting case laws ?
1. Whether entry tax is livable on introduced capital contribution in the form of plant and machineries though they is no movement of machineries from one place to another, there is no inward of machineries in the local area? It yes/ no than please give reason with case lawas.
C.A. Pooja Duggad ( Baghrecha)
H.M.Patnaik
(Expert) 25 September 2014
Even though the newly formed Partnership firm is a separate entity requiring VAT Regn.the owners of the industrial assets are having substantial interest in the Partnership firm and as such transfer assets of the proprietorship firm may not attract any VAT liability on the ground that this is not sale/transfer of Capital assets but merger f business of the two firms.
Rajendra K Goyal
(Expert) 25 September 2014
It is not a sale of capital goods but merger of entity. Go for appeal if tax liability fixed.
ajay sethi
(Expert) 25 September 2014
consult your tax consultant
