Who will pay vat
This query is : Resolved
15 October 2012
hi, i have purchased underconstruction flat from x-person and x-person had purchased that flat from builder, then who will pay vat in this case as this is resaling of underconstruction flat, pls advice
15 October 2012
Firstly builder will pay the MVat. He will recover it from the exowner of ur falt and the exowner will recover it from you as u r the end user.
16 October 2012
Agreed with the reply
16 October 2012
thanx sir,ok, but on which amount it will applicable , on agreement value made btwn builder and owner, or on agreement value me and owner? Bcz owner agrmnt have less cost that that of mine agreement have.
16 October 2012
Mr Ganesh,
VAT is payable on the trasfer of property in the contruction work.For the part of construction that was already done before you bought it your seller(Mr X) has to pay.For material supplied by the builder after you took it you have to pay. The builder's value is important. Although Mr X is selling to you an unfinished house/flat it is a sale of animmovable property. So,no vat on it.You may forget the excess amount paid by you to X over the builder's rate. You have to pay vat to the builder on the material value only, not the entire amount(this excludes cost of land,amenities,labour charges,and other charges)......MJK
VAT is payable on the trasfer of property in the contruction work.For the part of construction that was already done before you bought it your seller(Mr X) has to pay.For material supplied by the builder after you took it you have to pay. The builder's value is important. Although Mr X is selling to you an unfinished house/flat it is a sale of animmovable property. So,no vat on it.You may forget the excess amount paid by you to X over the builder's rate. You have to pay vat to the builder on the material value only, not the entire amount(this excludes cost of land,amenities,labour charges,and other charges)......MJK
10 November 2012
Sir ,
Have purchaced this flat at RS 2525 per Sq Ft. total value Rs 1111000 /-
Exowner purchaced at Rs 5,97,000/- agreement value.
What amount exactly I have to Pay as VAT.
Also do we have to pay Service Tax or not
Have purchaced this flat at RS 2525 per Sq Ft. total value Rs 1111000 /-
Exowner purchaced at Rs 5,97,000/- agreement value.
What amount exactly I have to Pay as VAT.
Also do we have to pay Service Tax or not
10 November 2012
Mr Ganesh,
Now, you have paid Rs5,14,000/- in excess of agreement value,after the construction is over(I think I am not wrong). So this excess is out of the ambit of any tax.Out of Rs5,97,000/-on the part related value of material+profit VAT is applicable. On part related to services(labour payments and expenses on srvices like electricity,water,transportation etc)+profit ST is applicable.Normal rates are VAT is 14.5% and ST is 12.36%.If option is made to pay under composition scheme then 4% VAT and 4.12% ST on the entire construction value. To arrive at the construction value the labd cost and chatges made for amenities such as club,swimming pool,registrtion electricity and water charges etc are to be deducted from the total value.....MJK
Now, you have paid Rs5,14,000/- in excess of agreement value,after the construction is over(I think I am not wrong). So this excess is out of the ambit of any tax.Out of Rs5,97,000/-on the part related value of material+profit VAT is applicable. On part related to services(labour payments and expenses on srvices like electricity,water,transportation etc)+profit ST is applicable.Normal rates are VAT is 14.5% and ST is 12.36%.If option is made to pay under composition scheme then 4% VAT and 4.12% ST on the entire construction value. To arrive at the construction value the labd cost and chatges made for amenities such as club,swimming pool,registrtion electricity and water charges etc are to be deducted from the total value.....MJK
11 November 2012
Thank you sir..
The Property is at Badlapure, dist- Thane- Mumbai
Actually building is under construction still, when I bought flat it was 70 /80% completed..
I have NOC of 85% completion, also builder got current 95% completed certificate..
Also have avail Loan and it will disburse soon.. I scared if exowner refuse to pay VAT & ST.
Is there any Circular or site where i will get written proof to explain my pint?
If exowner refuses to pay these charges I will hold payment instead if i have proof in my hand..
Please advice .. please..
The Property is at Badlapure, dist- Thane- Mumbai
Actually building is under construction still, when I bought flat it was 70 /80% completed..
I have NOC of 85% completion, also builder got current 95% completed certificate..
Also have avail Loan and it will disburse soon.. I scared if exowner refuse to pay VAT & ST.
Is there any Circular or site where i will get written proof to explain my pint?
If exowner refuses to pay these charges I will hold payment instead if i have proof in my hand..
Please advice .. please..
11 November 2012
Mr Ganesh,
There are several points in this problem.If the ex-owner(who sold the apartment to you)had already paid the full agreement amount to the builder, he is supposed to have paid all the taxes.As per the VAT laws(MVAT also) taxes are to be colleted as when payments for the work are received. The builder should declare all the payments to the department,within a month and pay VAT and ST along with. How much your apartment seller had paid to the builder when he sold it to you is important.If he had made 80% of the payments to the builder he should have paid taxes also to that extent.If you are to make any payments to the builder you have to meet the tax burden on that amount only.Sometimes the builders come at the end to collect tax,which is wrong. This is just like normal sales.A shop keeper has to collect tax at the time of sale by issuing an invoice.While making the purchase agreement you should have been careful on this point.MVAT law soecifies,in genral,tax is to be collected on all sales(this is also a kind of sale)at appropriate rates,by issuing invoice, and declared to the department in returns alonwith payment of tax.So, your ex-owner stands responsible to pay taxes on the amounts paid by him to the builder...MJK
There are several points in this problem.If the ex-owner(who sold the apartment to you)had already paid the full agreement amount to the builder, he is supposed to have paid all the taxes.As per the VAT laws(MVAT also) taxes are to be colleted as when payments for the work are received. The builder should declare all the payments to the department,within a month and pay VAT and ST along with. How much your apartment seller had paid to the builder when he sold it to you is important.If he had made 80% of the payments to the builder he should have paid taxes also to that extent.If you are to make any payments to the builder you have to meet the tax burden on that amount only.Sometimes the builders come at the end to collect tax,which is wrong. This is just like normal sales.A shop keeper has to collect tax at the time of sale by issuing an invoice.While making the purchase agreement you should have been careful on this point.MVAT law soecifies,in genral,tax is to be collected on all sales(this is also a kind of sale)at appropriate rates,by issuing invoice, and declared to the department in returns alonwith payment of tax.So, your ex-owner stands responsible to pay taxes on the amounts paid by him to the builder...MJK
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11 November 2012
Thanks a lot Sir...
If any further query will get back to you.
Thank you very much for this valuable advice
If any further query will get back to you.
Thank you very much for this valuable advice
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