The State Government has decided to exempt cars and motorbikes/scooters from levy of the Value Added Tax (VAT) in case vehicles are purchased by serving and ex- army men. The State Cabinet took a decision to this effect last week and now the Government is expected to issue a detailed notification in a day or two.
Any army personnel-serving or retired will not be required to pay VAT while purchasing a car or bike/scooter from a dealer in the State. However, this facility will be subject to the condition that the beneficiary will not transfer a vehicle so purchased to anyone other than his close relations like husband, wife, son, daughter, father mother and sister for next 10 years from the date of registration of the vehicle.
Also, the Government will give the tax exemption only on 1200 cars and 3000 bikes/scooters in a year.
The rate of VAT applicable on automobiles in UP is 13.5 per cent which also includes one per cent of Special Additional Tax (SAT). Going by this, army personnel will be saving Rs 54000 while purchasing a car worth Rs 4 lakh and Rs 6750 on a motorbike coming for Rs 50 thouand.
The tax exemption, according to principal Secretary (Tax and Registration) Desh Deepak Verma will cause Rs seven crore-revenue loss to the exchequer per annum, but the move, he said would immensely benefit army persons. He said the notification was being vetted by the Law Department was would be issued very soon.