GOVERNMENT OF ANDHRA PRADESH COMMERCIAL TAXES DEPARTMENT

PROCEEDING OF THE AUTHORITY FOR CLARIFICATION AND ADVANCE RULING

(Under Section 67 of APVAT Act, 2005)

Present :

Sri T.Yugandhra Reddy, Addl.Commissioner (VAT)

Sri T.Vivek, Jt.Commissioner (VAT)

Sri K.Raghavaiah, Jt.Commissioner (Audit)

CCT's Ref.No.PMT/P&L/A.R.Com/6/2005, Dated 30-4-2005

Ref.CCT'S REF.NO.PMT/P&L/A.R.COM/2005, DATED -5-2005

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O R D E R:

M/S Automotive Manufacturers Private Ltd., (TIN No.28050131175), R.P.Road, Secunderabad have filed an application on 7-4-2005 and sought clarification and Advance Ruling on the following items under Section 67 of the APVAT Act, 2005 read with Rule 66(2)(i) of APVAT Rules, 2005. along with the fee application fee of Rs.1000/-. The application is examined and found in order. Hence admitted.

They sought clarification on the following issues.

1) Whether amounts collected at the time of sale of vehicle for " Extended Service " which is purely labour charge for availing services at various intervals is liable to tax.

2) Whether insurance amount collected in bill at the time of sale of vehicle is liable to tax under APVAT Act.

The case was posted for hearing on 25-4-2005. Sri k. Lakshmipathi Rao, DGM, Accounts appeared on behalf of the company and explained the issue.

The issue has been examined with reference to the provisions of the APVAT Act and Rules and the ruling is given as under:

1) & 2) Sub section (29) of Section 2 of the A.P. VAT Act enunciates that 'Sale Price' means – (a) the total amount set out in the tax invoice or bill of sale.

Therefore, any amounts collected towards 'extended services' and 'insurance premiums' in the tax invoice issued by the dealers forms the part of sale price and liable to tax.

Note: An appeal against this proceedings can be filed before the Sales Tax Appellate Tribunal, A.P., Hyderabad within 30 days of this ruling.