The Commercial Tax Department, Government of Karnataka has issued a clarification under section 59 (4) of the Karnataka VAT Act regarding the rate of tax applicable on “Sale of used motor vehicles” in the state of Karnataka. The Department clarified that the “used motor vehicle” is liable to tax at 5% provided no input credit available in respect of the vehicle sold and the motor vehicle has been registered in Karnataka under the Motor Vehicle Act, 1988 before its sale.
