If I buy an under construction property in Mumbai which was earlier allotted by the builder to the land owner, through a tripatriate agreement with the land owner and the builder, is VAT payable on this transaction? What would be the GST implications?
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Answered on November 08, 2017
VAT would be payable by the builder on flats allotted to land owners. Subsequently when the land owner sells flats to third party, no VAT would be paybable by the land owner on such subsequent sale.
Construction of a complex, building, civil structure etc intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, is deemed as a service. Hence, GST should be leviable on construction activities carried out by a builder for land owner/prospective buyer. However, when a land owner subsequently sells flat to a third party no GST shall be levied on him as he is not carrying out any consturction activity for the prospective buyer.
Construction of a complex, building, civil structure etc intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, is deemed as a service. Hence, GST should be leviable on construction activities carried out by a builder for land owner/prospective buyer. However, when a land owner subsequently sells flat to a third party no GST shall be levied on him as he is not carrying out any consturction activity for the prospective buyer.
