One private limited co has purchased vehicle in 2016. They have taken VAT credit on the same. The same has been in the name of director and depreciation has been claimed.

Now in 2017-18 director has resigned from company and now company want to transfer this asset in his personal name? What are the consequences? GST impact???

What if company sold this asset to third party? Whether GST applicable ??

Reply

A company cannot claim depreciation on an asset which is purchased in the name of director in individual capacity.

Further as per Notification no. 8/2018 (Central tax rate) a registered person who has claimed depreciation under section 32 of the Income-Tax Act, 1961(43 of 1961) on the old and used vehicle, the taxable value shall be the difference between the consideration received for supply of such vehicle and the depreciated value of such goods on the date of supply, and where the margin of such supply is negative, it shall be ignored.  

Provided that the supplier of such goods has not availed input tax credit as defined in clause (63) of section 2 of the Central Goods and Services Tax Act, 2017, CENVAT as defined in CENVAT Credit Rules, 2004 or the input tax credit of Value Added Tax or any other taxes paid, on such vehicles.

As mentioned in the query, that company has taken input tax credit at the time of purchase of such vehicle, taxable value will be transaction value.