If a builder is selling a ready flat, can he aviod collecting & paying mvat?any necessary conditions to fulfill ?
Is there any difference in type of agreement for sale of a ready flat and under process flat in such case?
nilesh (PROPRIETOR) (208 Points)
11 October 2013If a builder is selling a ready flat, can he aviod collecting & paying mvat?any necessary conditions to fulfill ?
Is there any difference in type of agreement for sale of a ready flat and under process flat in such case?
MJ Krishnamurthy
(ACCT(Retd))
(7197 Points)
Replied 12 October 2013
In the Raheja Devopment Vs St of Karnataka &others, the honourable SC have decided that there will be no vat liability on the sale completed apartments. The builder will have to prove that a proper completion certificate is issued by a competent authority before selling a flat to claim exemption.Now ,recently,on 26th Sept,2013,in a referral order tthe SC have further clarified that if a flat buyer enters into an agreement during the construction of an apartment building,the vat liability will be on the balance part of construction done after the agreement.For ex :if an agreement of construction sale of flat is done when about 90% of construction was already over,then the vat is payable on the balance part i.e.10% of the construction only.However,this latest decision is yet to be implemented by the state govts......mjk
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