I have a doubt on the VAT to be paid on an agreement value. My builder is asking me to pay 5% VAT on the agreement value for a flat bought in June 2008. Please suggest as to who is liable to pay the VAT and how much should it ideally be?
Answered on November 08, 2017
In Maharashtra, VAT on sale of underconstructed property brought into effect from June 2006. Hence, builder would be liable to pay VAT on agreement to sale effected in June 2008. There are various methods for arriving at the taxable value of transfer of property in goods during construction.
Libality to pay VAT by flat buyer to the builder would be dependent on the contractual arrangement between the parties. However, like any other indirect taxes, builder may shift the incidence of VAT on the flat buyer.
Under the GST scenario, no composition scheme has been pronounced as in case of VAT legislation. Hence, GST shall be leviable at applicable rate (currently 12%, in case consideration is inclusive of tranfer of property in land)
Under the GST scenario, no composition scheme has been pronounced as in case of VAT legislation. Hence, GST shall be leviable at applicable rate (currently 12%, in case consideration is inclusive of tranfer of property in land)
