ARTICLE: How to sell a *USED* car in India

[khoj]

I sold a car last year which was registered in my company's name(proprietorship). The monies realized from the sale went towards purchase of another car. Now my accountant tells me that I am liable to pay sales tax on the sale. Is this correct, I have asked around but no one is clear what happens in case of Proprietorship companies. Does anyone have any idea regarding this, please advise asap as i plan to sell another vehicle soon.

[ramzsys]

The time between the two ads was less than a month.

Is there any foulplay here? Or is the car changing hand between the dealers?

PS: The right ad came first. I believe the real value for this car is around 1.5 lakh.

[GTO]

Originally Posted by mkh

Called him up: he has agreed to transfer, also he has agreed to give me a copy of the papers( which i seem to have lost) and i will send them by registered post to the RTO in any case right away!!
Thanks

Glad it worked out for you, Mkh. Do keep on following up with him until the transfer has gone through.

Originally Posted by khoj

I sold a car last year which was registered in my company's name(proprietorship). The monies realized from the sale went towards purchase of another car. Now my accountant tells me that I am liable to pay sales tax on the sale. Is this correct

IIRC, whenever a company registered car is sold, sales tax on the depreciated value of the car is applicable. Do double-check and update us though, I'm not 100% sure myself.

BTW, isn't it the buyer who always pays the sales tax?

Originally Posted by ramzsys

Is there any foulplay here? Or is the car changing hand between the dealers?

Or it could be the two different dealers advertising the same car? Or two similar (but different) cars in the market?

[nitrous]

OT:

Originally Posted by ramzsys

The time between the two ads was less than a month.

Is there any foulplay here? Or is the car changing hand between the dealers?

PS: The right ad came first. I believe the real value for this car is around 1.5 lakh.

I would say it is worth around 1 lakh in the current market.

[jerry can]

@GTO, thanks a million for this invaluable article!
I have a small query here:
My car which is registered in Delhi is being sold to a person based in Himachal Pradesh. Is the procedure for transferring the registration of the vehicle from one state to another the same as what you've mentioned in the article? Are there any additional steps/documents required?
Also, are three originals of the completed form28: application for noc sufficient for the buyer for transferring the vehicle, or do i have to obtain the NOC from delhi RTO and deliver the same to the buyer before he can obtain a transfer to his name?
Some people are saying that the RTO at the buyer's end will ask for the NOC before transferring the vehicle. If this is true, how will obtain the NOC?

[jerry can]

In addition to my above query, I'd also like to know whether Form No. 29 is required even if the car is not under a finance hypothecation or hire purchase? The Form requires the signature of the Financier to give his consent.
Also once I've provided these required documents to the buyer, does he have to submit the same to the RTO in his state or to the Delhi RTO.
Guys, I'd really appreciate some advice here as the sale is looming and I have to return to Delhi immediately after that. I shall be going back to HP only in march after this, and don't want the car transfer to keep hanging in the meantime.

[GTO]

Originally Posted by jerry can

do i have to obtain the NOC from delhi RTO

Some people are saying that the RTO at the buyer's end will ask for the NOC before transferring the vehicle. If this is true, how will obtain the NOC?

The NOC will be required by both RTOs, and is issued by the Delhi RTO.

Originally Posted by jerry can

In addition to my above query, I'd also like to know whether Form No. 29 is required even if the car is not under a finance hypothecation or hire purchase?

Yes, Form no. 29 is still required.

Also once I've provided these required documents to the buyer, does he have to submit the same to the RTO in his state or to the Delhi RTO.

He has to submit the same to his RTO.

[jerry can]

Hey thanks GTO. This clears things up.
So in effect I shall provide him the:
Form No. 28 (3 originals), Form No. 29, Form No. 30, Delivery report copy, RC, Tax documents, etc. immediately.
Then i obtain the NOC from Delhi RTO and send it to him. Once he receives the NOC only then he can submit the papers at his RTO, for the transfer.

[rock75]

Originally Posted by GTO

Step THREE : Payments & Documentation

To hand over to the buyer:

1. Form No.28 - Application for N.O.C. and grant of certificate, if the buyer falls in another RTO’s jurisdiction (3 Originals). Format attached.
To retain with yourself:

1. Form No.28 (Copy).

I am confused on this one, why do you have to give three originals of form 28 to the buyer and retain a copy. Isn't it the responsibility of seller to procure the NOC and supply it to the buyer? And in that case he would submit the form 28 in triplicate to his RTO and get an NOC and then give it to the buyer.

Also please clarify about the affidavit, is it required in all the states? If yes could you attach a standard format for affidavit for benefit of everyone?