Vat on builders under punjab vat act

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RAJESH GUPTA (Querist)
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04 May 2013 Sir

My Client is registered under the Punjab Vat Act 2005 as builder and contractors. He is constructing the flats on the land purchased in the name of co. He had made the purchases of Rs.100.00 lacs Within Punjab and out of Punjab against C Forms in Q4 and also received the Advance from customers against booking of flats Rs.50.00 lacs during Q4.
What is Tax Postion on Rs.50.00 lacs under Punjab Vat Act and How to show this amount in Vat Return

Ca Rajesh Gupta

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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05 May 2013 Mr Rajesh Gupta,
Advances are also receipts of works contracts.The main difference here is no invoices are issued while receiving advances from flat buyers.The best solution is the amounts of advance can be treated as inclusive of vat and also mention this point in the agreement made with the apartment buyers.Most of the builders do not issue invoice to their customers,but finalise the deal in registration.Rs50 laks rceived from customers on booking of flats is to be declared as receiptsinclusive of VAT,if not under composition scheme.Under composiiton scheme just 5% on this amount may be paid through returns. If not under composiiton scheme VAT and TOT shall be payable. Tax paid on purchases within Punjab can be claimed as input tax credit(deduction from the tax payable),subject to Sec 13 of PVAT Act on input tax restrictions.CST paid on interstate purchases can not be claimed.....mjk

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Amit Bajaj

Amit Bajaj (Expert)
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06 May 2013 Little bit corection. No composition scheme as yet being legislated under punjab vat act for the works contractors

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MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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06 May 2013 Good,Mr Bajaj, I suggested a point tentatively only. You had hinted this point earlier also.As there is no provision for composiiton scheme in Punjab VAT law, Mr Gupta can ignore that point.....mjk