Collection of vat and payment to govt.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

31 October 2014 MY PVT. LTD. COMPANY HAVING CONSTRUCTION BUSINESS OF RESIDENTIAL FLATS AND SHOPS WE GETS REGISTERED UNDER MAHARASHTRA VAT,THIS MONTH PLEASE HELP TO KNOW PROCEDURE TO COLLECT VAT FROM CUSTOMER, AND DEPOSIT THE SAME TO GOVT. CUSTOMERS DO BOOKING AND LATER PART PAYMENT, EVEN PAYMENT BY BANK ISSUED ON PART.

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
Follow

02 November 2014 You can pay tax on construction of flats and selling to customers in 3 ways 1) Direct VAT scheme : In this scheme out of the total amount received from the flat buyers you can deduct a)land cost as per guidance value under Stamps Registration Act,b)expenses on labour,its supply,establishment expenses(at work site),c)payment made to regisered subcontractors d) profit on these items e)miscellaneous charges and deposits other than construction(like deposit for elctricity,water,cable connection,amenities,association etc.On the balance amount,which is the material cost,plus profit,vat is to be paid at respective rate of tax after deducting the input tax paid on purchases.This tax payable amount i.e.output can be collected from flat buyers. 2) The second method is
composition scheme. In this scheme,you can deduct,land oost(as said above)and subcontract payments and pay 5% on the balance. VAT can not be collected and no input beneifit. 3) The third policy issued by the Maharashtra govt is special composition @1% on the whole amount without any kind of deduction and no collection of tax from customers.For the 2nd and 3rd methods option is to be intimated by an application.Service tax liability also arises on the value of services rendered......mjk