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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GERALD QUADRAS says : VAT on underconstruction flat - 2006 to 2010 - 5%
The Supreme Court has confirmed that VAT is payable on underconstruction property, but it has clarified one important point i.e. VAT on underconstruction property can be levied only on the value addtition of goods used in construction from the date of agreement i.e. if I have purchased a flat when it was say 90% ready, then VAT is payable only on 10% of the construction cost. I had raised this question sometime in Nov 2012 with you and at that time u had said that VAT is applicable on 100%. What are your views now, that the SC has clarified....

MJ Krishnamurthy says : TDS on works contract
Mr Bhavesh M ,There is some confusion in your mind. Works contract can be local or interstate transaction.CST law has been amneded suitably. The TDS made by you will be deposited to your state govt,whereas your contractor will pay tax Karnataka. So,he will pay double tax.Pleae read the section on TDS in TN VAT Act. It says TDS is to be made out payment due for TN VAT dealers only. Your contractor is not a dealer in TN but in Karnataka. Therefore you should not make any TDS in this transaction.....mjk

Bhavesh Mehta says : Works Contract continuation
Sir to the reply on the above on 15.aug 2013 by you, further I have received the reply from the customer as below: Works contract tax is a state subject where right to use of goods is transferred from buyer to seller. In our case, right to use of goods is transferred in Chennai (Tamilnadu) so Tamilnadu VAT/works contract tax is applicable. According to the local law we had deducted WCT - TDS on the time of payment. I request you to please clarify on what should we do?

vikash kumar says : thanks for response sir
In the my view within company branch transfer possible,transfering branch after written 2% can transfer am I wright with povision plz confirm. Thanks

MJ Krishnamurthy says : vat on flat
Indore is in Madhya Pradesh,so,sec 9B of MP VAT Act shall apply. In this section 5% vat it is levied on the capital value of a building. The capital value means as per sub sec 2 of sec 9B is the value obtained after deducting the market value of land from the total value of the built property. It means that the builder should deduct the value of land and cost of other amenities provided free of cost,such as club house,swimming pool,park,childrens park,courts for games etc.Apart from these charges some builders collect deposit for registration,electrification,watersupply and so on. All these amounts are to be reduced from the total cost of the flat and 5% vat is collectable on the balance value.A builder is a dealer and he can collect vat on the property sold by him to his customers. In the absense of details correct liability can not be estimated. However,normally,taxable amount will be around 50% of the total charges made.So, the builder should not collect more than 2.5% on the whole price of the flat..mjk