I have one problem, We have formed Two Partnership Firm, Partner is same Two Firms
First Firms are Procurring the Land and sale the Sites to customers
now we have to go for construction with Second Firm (group firm), all construction activity comes this Firm, all taxes ( VAT & Ser.Tax) paid for construction Activity.
my queery is some customers go for bank loan, that time bank will release the funds for Site and Construction, This Funds entirely goes to First Firm that time we have to trf to fund what ever construction consideration to Second Firm internaly adjusted, That time we have any taxes applicable in First Firm (VAT / Ser.Tax) for Construction Activity.
17 September 2008
What I have understood from your question is that the first firm have sold the share of Land to purchasers. Your second firm is carrying construction work on behalf of customers. If it is so, then why the first firm is accepting the sales consideration from cutomsers or their bankers? In what capacity and for which purpose the first firm is accepting the same is not clear. However, VAT is liable to pay only on sales (including deemed sales under WC). Only on money transactions or book entries no VAT can be levied. Please elaborate your plannings , so that a proper reply can be attempted. You may mail me at opg_fca@sify.com
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