By G. G. Goyal
Janak Vaghani Chartered Accountants
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VAT – Turnover of Sales – Deemed Sale – Transfer of Right to Use Goods – Rentals Received or Receivable in Given Period Only Taxable, Section 2 (2C) (iv) of The Haryana Value Added Tax Act, 2003.
FACTS
The appellant entered into agreement for lease of vehicles. The assessment orders were finalized by taking aggregate amount of all installments payable for the entire term of the lease periodfor the month in which the vehicles were delivered to the lessee. The appellate authorities including the Tribunal dismissed the appeal. The appellant filed appeal before the P & H High Court against the said order of the Tribunal dismissing the appeal.
HELD
The definition of tax period in terms of rule 2 (2f) of the Rules means a period of time usually a month, quarter or a year for which tax payable by a dealer is quantified. The turnover is aggregate of the goods sold or purchased by a dealer during a tax period in terms of rule (2g) of the Rules. Since the transfer of right to use in the vehicles is the sale falling within the definition of section 2(f), therefore, rentals received or receivables during the tax period is the sale price received by the dealer, exigible to tax in a financial year. The right to use vehicles is dependent upon monthly payment of rentals and therefore, the monthly rentals received or receivable by the dealer is a turnover and consequently the sale price. The lease rentals received or receivable during the tax period only, as a right to use goods, is the turnover forming part of sale price. Accordingly, the High Court allowed appeal filed by the appellant company and set aside the order passed by the Tribunal.
