The earlier service tax and vat will be adjusted and the builder can claim input credit for the same. You need to just pay excessive stamp duty and registration depending on increase in area for the other flat if any
Loss of tax paid for Swapping flat in same apartment
Hi , I purchased a property in Bangalore from a Reputed builder - Puravankara in June 2016. Since it was pre GST, I was charged VAT and service tax. Now I am getting the possession of my flat(registration not yet done). I want to upgrade to a bigger unit now, but the builder is not showing too much interest. They are charging me on the new rate for the new flat, and the most concerning thing is that they say the service tax and vat that I have paid for my existing flat (8lacs) will be lost. I need help in understanding how I can save my tax paid and deal with the builder on the same. In my understanding the VAT and service tax should get either transferred to the new unit or should be passed on to the new buyer of my current flat. Regards Abhishek
Asked 6 years ago in Taxation
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7 Answers
The builder or the developer is not interested in accepting your request hence they are giving such hard reasons.
If you do not want to exchange the property then they will be okay with the existing rules.
In fact they treat you as a new buyer hence they impose the latest conditions.
You cannot ask them to change their terms, which they will not agree or would cooperate with you.
Hence you may have to look for alternate option only.
This will be to separate deals the amount of VAT paid for the previous booking will not be transferred to your new transfers and that is the reason builder is not showing any interest in that eventually you have to pay applicable GST in this case and the previous benefit of VAT will not be available to you
Sir you have to pay the GST on the amount for new unit though since registration is not done builder can adjust the earlier amount with tax on it on new unit and can charge extra for extra area along GST since he is not interested that is why he is giving the lame excuses and he cannot be forced since you were in deal for different flat.
1. The version of the builder is right. It collected tax from you at the time when it was chargeable. It did not take anything extra out of its will.
2. Now when you purchase a new property or exchange it then you will have to pay the price including tax at the present rate.
3. In other words you can not seek adjustment of service tax or VAT with the present one which you see to exchange.
What do you mean by upgrade to a bigger unit now ?
If you are paying more amount in addition to payment already made than on additional amount, GST will levy and rest amount will remain same.
Even if this will consider as fresh purchase still GST will levy on that amount which is paid after GST .Part payment made pre GST so, same tax will levy.
Builder is fooling you. Either builder have to return full amount with tax and than payment with GST for bigger flat but in no case tax already paid will lost.
1. The tax should be adjusted by builder while upgradation of flat.
2. Builder must be doing this to avoid the exchange due to reasons best known to him.
3. The tax should be paid on the excessive amount on upgradation.
