in the case of sale of fully constructed flats, VAT will not be levied;

2) Supreme Court in the case of M/s Larsen & Toubro Ltd. vs. State of Karnataka has upheld the levy of VAT on sale of under-construction flats on the grounds that it involves an element of works-contract.

After GST only GST will be payable, no other tax is to be paid

VAT is basically a State subject, derived from Entry 54 of the State List, for which the States are sovereign in taking decisions. The State Governments, through Taxation Departments, are carrying out the responsibility of levying and collecting VAT in the respective States.

2) The Goods and Services Tax (GST), which will replace the State VAT, Central Excise, Service Tax and a few other indirect taxes will be a broad-based, single, comprehensive tax levied on goods and services.

3) if GST comes into force from 1st July no question of VAT increasing in Telengana

after GST no VAT would be leviable

2) The Goods and Services Tax (GST) rate of 12 percent will be applicable on under-construction properties.

the liability to pay VAT is on the developer

1. Goods and Service tax is going to be implemented from 1.7.2017 which will replace all other taxes.

2. It is not yet clear whether the aggregate tax on sale of flat will increase after implementation of GST or not.

3. I personally have this problem since I have already paid 95% of the total consideration of a flat costing me Rs.1.5 Crore to the developer who are Govt. Agency. They could not yet confirm whether I shall have to pay more on account of GST after 1.7.2017 or not.

4. However, private developers are asking buyers to immediately pay the balance amount to avoid paying more tax on account of GST.

5. In absence of a clear picture in this regard, I have decided to wait and not to hasten up.

After implementation of GST from 1.7.2017, there will be no VAT or any other form of tax to be levied on the buyers..

1. It is supposed to be paid by the buyer.

2. However, from 1.7.2017 GST at applicable rate shall have to be paid by the buyer.

No. After implementation of GST, no other form of Tax including VAT will be applicable while buying any goods and/or services in India.

My builder has given possession since 2013 but the flats are still not registered in individual names. During possession the builder collected 3.09% as service tax, however now the builder in the name of MMH Retail Holdings Ltd is asking to settle 1.5%VAT by 30 June as the VAT in the state of Telangana is expected to increase to over 5% from July.

Should the VAT be settled outside flat registration?

The demand for additional VAT is unreasonable especially demanding the same quoting the future event on it.

An under-construction property can be divided into three parts, vis-à-vis its cost components. The first part is the cost of the land and calls for no VAT or service tax. The second part is the cost of material which is liable for VAT. The third part is the cost of construction and involves labour charges and can be treated as a service that is rendered by the developer to the purchaser. Therefore, service tax can be levied on this component.

VAT is levied on the sale of goods (movable properties). For any sale to attract VAT, it should involve a transfer of goods from one person to another. In the case of under-construction properties, it is the transfer of ownership rights from the developer to the buyer in the form of a sale agreement, in select states. This tax is governed by the ‘works contract’ in the VAT law. For instance, VAT is charged at the rate of one per cent of 'agreement value' in Mumbai and Pune and five per cent in Bangalore, but there is no VAT levied on apartments purchased in Noida, Chennai, and Kolkata. For more information on property in Noida,

Is the VAT a state subject or Central tax. Is the VAT going to increase in the state of Telangana from July?

at present Service Tax and VAT are applicable to all under-construction property transactions. Their actual value varies from state to state, depending on where the property is being constructed.

Once GST is rolled out, these and other central and state indirect taxes will be subsumed and a consolidated indirect taxation regime will come into force.

Who should be liable to pay VAT, the builder or owner of the flat?

The cost of material which is liable for VAT.

VAT is levied on the sale of goods (movable properties). For any sale to attract VAT, it should involve a transfer of goods from one person to another. In the case of under-construction properties, it is the transfer of ownership rights from the developer to the buyer in the form of a sale agreement

After GST, is VAT for flats purchase applicable?

Once GST is rolled out, these and other central and state indirect taxes will be subsumed and a consolidated indirect taxation regime will come into force.