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Vat & service tax on ready to move in apartment from builder

Jiten (Consultant Banking & Financial Services) (32 Points)

06 October 2016

Dear Sir

We are planning to buy a Ready To Move In Apartment in Bangalore directly from the builder for which Occupancy Certificate has already been issued by the concerned authorities i.e. BBMP and he has provided the following Breakup

1. Basic Cost - 45L

2. Car Park - 3L

3. Generator Charges - 50K

4. Maintenance Deposit and Charges for one year - 70K

5. Electricity and Water Deposits - 2L

6. Legal Charges - 50K

As per him VAT & Service Tax of Rs.2.90Lacs are applicable and have been added to the Total Cost. He has also stated that the registration will be done on the Basic + Car Park Cost and Not as per the Guidance Value issued by the BBMP.

Request you to please guide in the matter.

Warm Regards

Jitendra

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1 Replies

CMA Poornima Madhava (CMA) (13112 Points)
Replied 06 October 2016

As I understand, we can register property for the value of sale consideration provided such consideration is more than guidance value but the other way is not possible. That is we cannot register for a value less than guidance value. In your case, if sale consideration is less than guidance value, then property has to be registered for guidance value. But if sale consideration is more than guidance value, then it is sufficient to register the property for guidance value in order to save on stamp duty.
With regard to VAT and ST, VAT is applicable. But ST is not applicable, since occupancy certificate is already issued by concerned authority in respect of the subject flat.