Vat tax on property
Vishal
(Querist) 17 October 2012
This query is : Resolved
1) VAT TAX on Property:-
A few buyers have entered into agreement before the Completion of Construction. Are they liable to pay VAT on such purchase. Builder has put a clause in agreement also regarding payment of VAT if the Government wins the case.
A few buyers have entered into agreement after the Completion of Construction ie OC have been received. Builder has put a clause in agreement also regarding payment of VAT if the Government wins the case in such agreements as well. But to our knowledge such transaction does not give rise to VAT tax liability. Are they liable to pay VAT on such purchase.
Builder is asking VAT @ 5% on Agreement Value. Is he justified. He must pass the set off benefit to us or not.
If he must then what must be effective Rate at which VAT payment must be made. Also on what Value such VAT must be paid.
2) Builder is not passing the Conveyance in favour of society:-
He is delaying it on the pretext that that he still has 4 Galas left to be sold & that if the Society bears the Registration free then only he will transfer the Conveyance to Society. Is he Correct in asking so???
We would be very helpful if you could guide us.
Thanks & Regards,
Vishal Jain
Member of Kushal Mangal Industrial Estate..
Tajobsindia
(Expert) 18 October 2012
1. Read down old reply on similar facts at link
http://www.lawyersclubindia.com/experts/Service-tax-and-vat-for-flat-321986.asp
Vishal
(Querist) 18 October 2012
can any one pls guide me on my queries..
R K JAIN
(Expert) 22 October 2012
VAT will be payable if the agreement is made before construction. VAT will not be applicable for the sale after completion of construction.
Vishal
(Querist) 22 October 2012
Sir,
What will be the rate at which VAT must be payable.
R K JAIN
(Expert) 25 October 2012
There is no rate of tax prescribed by the Government in such type of case since the tax can not be imposed on flat but the contractor is to pay the tax so he is calculating the tax on his turnover of constructing the whole tower/building and proportionately he is transferring the burden of VAT on the customer. The tax liability in the case of lump sum scheme is fixed on the whole sale value but in the case of other case the tax liability is as per the rate prescribed on the goods used in the construction since the goods are transferred and VAT will be applicable on goods.
