Car purchase: No VAT for Army personnel

Army personnel will get exemption from value added tax on purchase of two-wheelers and light motor vehicles from defence canteens in Uttar Pradesh, official sources said in New Delhi on Wednesday.

"A notification to give exemption to Army personnel on purchase of vehicles from canteens was issued by the tax and registration department on Tuesday," they said.

As per the notification, exemption in VAT would be limited to sale of 3,000 motorcycles, scooters and mopeds and 1,200 four-wheelers every year, they said adding that serving personnel of Indian Army, other security establishments and ex-servicemen will get the benefit of tax exemption.

This tax exemption will, however, result in Rs 7.29 crore (Rs 72.9 million) annual revenue loss to the state government, official sources said.

The notification also stated that Army personnel willing to avail tax exemption will be required to get an authority letter from the commanding officer. Besides, an officer will not be allowed to transfer a vehicle to any person other than spouse, ward, serving or retired armyman for a period of 10 years.

This condition will be mentioned on the registration certificate of the vehicle. At present 12.5 per cent VAT and one per cent additional tax is being charged on vehicles.