Purchase agreements are very similar to hire-purchase agreements, and in fact, the actual object of a hire-purchase agreement is ultimately the sale of the goods.-Nevertheless, a sale must be distinguished from a hire-purchase, since their legal incidents are very different. 6. In the case of a sale, VAT is levied at the time of conclusion of the contract, while in the case of hire-purchase, VAT is only levied when it finally expires on sale (K.L. Johar & Co.c. Dy. Commercial Tax Officer). In the hire-purchase system, the seller and buyer have agreed to a certain rate and, in most cases, the agreed payments include the price plus interest on the asset provided to the lease buyer. A hire-purchase agreement can also be distinguished from a “contract of sale” (or a contract of purchase) from the buyer`s point of view).