MJ Krishnamurthy's Expert Profile

Queries Replied : 1703

About me

I am a retired Assistant Commisioner of Commercial Taxes of Karnataka. I retired in 1998 at the age of 58.During this service I tried to go in detail about sales tax laws. Immeadiately after retirement some companies wanted to retain me as their consultant. That is how my touch with the subject of VAT laws continued.The website of CAclub india is giving a good opportunity to share my knowledge with others. I am an exserviceman from IAF. So, Iam a little different from other taxmen. We should do some service to the community that has offered us so much, That is my purpose.....Bye.

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Jayendra Jadhav says : 5% MVAT demand letter from Builder
Thank you Sir for your advice. What is the builder denies to provide the invoice? Can i take any stand in case he denies to provide me with an invoice? Also they mention that in case we are not paying the MVAT then once OC is received for the building there will be intrest on MVAT. Also how can then assure that this amount gets paid to government?

MJ Krishnamurthy says : 5% MVAT demand from builder
Mr J Jadhav, 5% and 1% are the applicable rates for diffrent types of flats. If the agreement is done before 1-4-2010,it is 5% and for those with agreement after 1/4/2010,as per a notification dated 9-7-2010,under a special composition scheme it is 1%.5% VAT is payable on the works contract value only. This excludes the land cost(40%),cost of amenities like lift,club house,parking,security, swimming pool,garden etc and sometimes registration expences(10-15%). The builders claim exemption on all these items in their returns and pay5% on the balnce amount.He should issue a tax invoice for collecting 5% VAT.For collecting 1% vat ,which is on the whole amount paid for a flat no invoice will be issued.In many cases amount charged for a flat is less than it is registered.Keep this point also in mind. Out of the registered amount you have to deduct shares towards land cost,and amenities as shown above. A builder may pay only 25% of the amount demanded from you if under normal composition scheme. Without an invoice do not pay any tax i.e. 5%.....MJK

Jayendra Jadhav says : 5% MVAT demand letter from Builder
Dear Sir, I have bought a flat in Thane, Maharashtra. Agreement of the flat was done in April2009. Possession of the flat was to be provided in March 2011 but delay from Builder end now when he is asking to take possession he is asking for 5% MVAT. AS per him there was a stay on MVAT by the HC since the judgement was not passed. But recently in April 2012 he say the builders have lost the case and therefore 5% MVAT needs to be paid. Since my Flat cost is 79Lacs the MVAT i am asked to pay is 3.90 Lacs. I am shocked and do not know how can i take this up because the builder never informed us. I check with other friends who have booked flat with other builders. They have received letter too but some of them are asking for 1% only and some of them are just asking them to be ready. My question is 1. Do we need to pay this 5% MVAT? How is this calculated? How much do i really need to pay? How do i know this is really demanded by the government? 2. OR should i take this case with lawyer because i feel cheated. with best regards Jayendra

MJ Krishnamurthy says : VAT on stationery
Ms Yamini, There are still many more items of stationery,office files,stapler and pins,calculatorsare chargeable with full tax,13.5%,some more other articles such as erasing rubber,account books,writing inks,pencils are liable for 5% tax...MJK

Yamini Chandak says : VAT on Stationery in MVAT Act
Appreciate your response. If you could help me with the rate applicable for PP(poly proplyene) files example: expanding file, clip file or a lever file; calculator; stapler to name a few.