Service tax for old car sales by a authorised dealer, Service Tax

[vasudevan sathiyanarayanan]

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

 

Posts / Replies

[Ramanujam Varadarajan]

In any case Trading activity (i.e. the activity of purchase and sale) is coming under Negative list under Service tax and thus not liable to service tax.   The transfer or non-transfer of car as per RTO provisions has no relevance for the purpose of applicability of VAT or non-applicability of service tax on a sale.