Bringing sales of pre-owned commercial vehicles into the organised tax collection net, the state government has decided to levy two per cent VAT (value added tax) on the pre-owned commercial vehicles sold through the registered dealers.
Earlier, the levy was confined to the sale of pre-owned cars only.
However, the dealers will not be entitled to any claim for input tax credit on the tax paid on the materials purchased for use in renovation or repair of the pre-owned commercial vehicles before resale.
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Officials in the finance department maintained that a sum of Rs 10 crore will come to state's kitty from the two per cent levy.
The VAT rate is applicable to sale of all the commercial vehicles after the vehicle re-financing companies wrote to the state government for making it organised, said an official in the finance department.
The decision was taken after a detailed assessment only, the official added.
He said, due to rise in resale of heavy vehicles, there was a need to cover all the commercial vehicles to be sold through the registered dealers.
It may be noted, following slowdown in the mining sector, there is an increase in auctioning of heavy commercial vehicles confiscated by the financing companies for default in payment EMIs (equated monthly instalments). The rise in the number of defaulters may be due to the several measures initiated by the state government to curb illegal movement and pilferage of iron ore in the state.
The state mining department, in 2012, had issued set of guidelines for trucks plying on all mining routes to stop overloading and desist from illegal ore ferrying of ore, forcing thousands of trucks, which did not have necessary permission, to remain off roads.
The mining sector went through a tumultuous phase after the emergence of the large scale mining scam in the state.
"The sales of pre-owned vehicles were not taking place in a systematic way. It is required to put a system in place," said a company official that finances heavy commercial vehicles.
